People & Planet Report 2018

People & Planet Report 2018 About this The scope of this report compatibility with other organizations, our report is diversity information. The reports are available at The scope of this report is Nokia Group in 2018, prepared in accordance with the Global Reporting www.nokia.com/investors. including the Networks business, Nokia Technologies Initiative GRI Standards, Core-option. Our report is report and Group Common and Other. The report contains also compliant with the advanced level of the UN In addition to our own reports, we provide detailed limited information on our undersea cables business, Global Compact. The Global Reporting Initiative information through various external reports. In Alcatel Submarine Networks (ASN), and our antenna index is available as a separate PDF document 2018, we again publicly reported our climate impacts systems business, Radio Frequency Systems (RFS). at www.nokia.com/sustainability and some key to CDP – a leading global organization working with Both ASN and RFS are reported in Group Common sustainability data is included as a separate section shareholders and companies to disclose the greenhouse and Other. Employee-related data presented at the end of this report. gas emissions of major corporations. More information throughout the report covers employees included on the external ratings is available at www.nokia.com/ in our central HR database, coverage of which was Our selected key sustainability indicators have about-us/investors/reports-and-filings. 95% in 2018. For more information on our financial been assured by an independent auditor of Nokia, results, operations, and reporting structure, please PricewaterhouseCoopers Oy. * Financial and operational information in this report should be read in conjunction with the information see www.nokia.com/financials. provided in our interim reports and annual financial Availability of this report reports, as well as the risk factors and forward-looking For an explanation of how we chose what to include This report was published in May 2019 and it is only statements included in such reports. in this year’s report, please refer to the section on available in digital format. We have also published materiality. supplementary information related to this report online at www.nokia.com/sustainability. We have Unless otherwise indicated or evident from the published annual corporate responsibility reports context, we generally provide information for the since 1999 and the reports are available in digital year 2018, with comparisons to the year 2017. format on our website from as far back as 2003 at our report archive. In trend reporting we use the term “Comparable Your feedback combined company” when we refer to information Sustainability and corporate responsibility topics are We welcome your views and questions on our activities and including combined Nokia Group and former Alcatel also discussed in our official annual reports, including our performance. If you would like to share your opinions, Lucent data prior to the acquisition of Alcatel Lucent the annual report on Form 20-F that is filed with please contact us at [email protected] in January 2016. the US Securities and Exchange Commission in the United States*. The Board Review of 2018 Annual Reporting frameworks and assurance Accounts includes non-financial information as Find us on social media In our reporting, we are committed to expanding required by the Finnish Accounting Act implementing Connect with Nokia on Twitter, LinkedIn, Instagram, our transparency and our coverage. To help ensure the EU Directive on disclosure of non-financial and Glassdoor and Facebook. Follow our blog.

Nokia People & Planet Report 2018 Nokia today Our approach Connectivity Environment Integrity People Together Key data Assurance 2 1.0 Nokia today 4 5.5 Respecting the right to privacy and freedom of expression – preventing the misuse of technology 102 2.0 Our approach 7 5.6 Responsible sourcing 106 Contents 2.1 Letter from the President and CEO 8 5.7 Combatting modern slavery in the supply chain 113 2.2 Sustainability highlights and challenges in 2018 10 5.8 Materials traceability and conflict minerals 115 2.3 Our sustainability priorities and impacts 12 5.9 Data privacy and security 117 2.4 Our sustainability targets and performance 20 2.5 Managing sustainability 33 6.0 Respecting our people in everything we do 120 2.6 Our recognitions and awards 36 6.1 Highlights in 2018 121 2.7 Our economic impact 37 6.2 Our commitments, targets and performance 123 2.8 Innovation and sustainability 40 6.3 Who we are 125 6.4 Making Nokia a great place to work 126 3.0 Improving people’s lives with technology 42 6.5 Human capital development 128 3.1 Highlights in 2018 43 6.6 Ensuring decent working conditions and fair employment 132 3.2 Our commitments, targets and performance 45 6.7 Diversity, inclusion and anti-discrimination 137 3.3 Connecting people and things 47 6.8 Strengthening our health and safety performance 142 3.4 Technology that makes a difference 52 7.0 Making change happen together 146 4.0 Protecting the environment 54 7.1 Highlights in 2018 147 4.1 Highlights in 2018 55 7.2 Our commitments, targets and performance 149 4.2 Our commitments, targets and performance 57 7.3 Making change happen together 150 4.3 Circular economy 60 7.4 Supporting our customers’ sustainability goals 151 4.4 Sustainable product design and materials 63 7.5 Collaborating with NGOs 153 4.5 Our products and networks – energy efficiency 7.6 Working with governmental and multilateral organizations 158 and carbon emissions 68 7.7 Collaboration with universities, cities, and other industries 162 4.6 Our own operations – energy efficiency and carbon emissions 73 8.0 Key data and reporting principles 164 4.7 Waste in our own operations 77 8.1 Data reporting principles 165 4.8 Circular practices and products 78 8.2 Environmental data 170 4.9 Water 80 8.3 Social, ethics and management systems data 177 8.4 Supply chain management data 182 5.0 Conducting our business with integrity 83 8.5 Financial data 184 5.1 Highlights in 2018 84 5.2 Our commitments, targets and performance 86 9.0 Independent practitioner's assurance report 185 5.3 Ethical business and corporate governance 90 9.1 Independent practitioner's assurance report 186 5.4 Addressing human rights 101

Nokia People & Planet Report 2018 Nokia today Our approach Connectivity Environment Integrity People Together Key data Assurance 3 1.0 Nokia today Nokia today

We create the technology to connect the world. We develop and deliver the industry's only end-to-end portfolio of network equipment, software, services and licensing that is available globally. Our customers include communications service providers who use our solutions to support 6.1 billion subscriptions, as well as enterprises in the private and public sector that use our network portfolio to increase productivity and enrich lives.

Through our research teams, including the world-renowned Nokia Bell Labs, we are leading the world to adopt end-to- end 5G networks that are faster, more secure and capable of revolutionizing lives, economies and societies. Nokia adheres to the highest ethical business standards as we create technology with social purpose, quality and integrity.

Nokia People & Planet Report 2018 Nokia today Our approach Connectivity Environment Integrity People Together Key data Assurance 4 1.0 Nokia today

Nokia today We are enabling the infrastructure technologies that will increasingly transform the way Organizational structure for 5G and the Internet of people and things communicate and connect. and reportable segments In 2018 we had organized our networks-oriented Things and shaping the future Our presence and employees in 2018 businesses into five business groups: Mobile In 2018 we had six business groups, with operations Networks, Fixed Networks, Global Services, IP/ of technology to transform the in Europe, the Middle East & Africa, Greater China, Optical Networks, and Nokia Software, and kept human experience. North America, Asia-Pacific, and Latin America. our driver of future innovation and licensing, Nokia At the end of 2018, we employed approximately Technologies, as a separate, sixth business group. We are a leader in mobile and fixed network 101 000 people, out of which more than a third As of January 2019, we have seven main business infrastructure with the software, services, and worked within our research and development (R&D) groups: Mobile Networks, Fixed Networks, IP/Optical advanced technologies to serve customers in in Europe, North America, and Asia and around 0.8% Networks, Global Services, Nokia Software, Nokia approximately 130 countries around the world. We in production. You can read more on our employees Enterprise, and Nokia Technologies. Nokia Bell Labs are driving the transition to smart, virtual networks in the Who we are section. leads the company’s research and development. and connectivity by creating one single network for For more information see our financial report at all services, converging mobile and fixed broadband, We closed 2018 delivering net sales of EUR 22.6 www.nokia.com/investors. IP routing and optical networks, with the software billion. We continued to make significant targeted R&D and services to manage them. Our research investments, a bedrock of our success in innovation, scientists and engineers continue to invent new with R&D expenditures equalling EUR 4.6 billion in 2018.

Net sales by business 20181 Net sales by region 2018

3 1 Nokia’s Networks businessEUR 20 121m (-2%) 2 Ultra Broadband EUR 8 692m (-2%) 1 A 1 Asia-Pacifi c EUR 4 081m (-3%) Networks 6 2 Europe1 EUR 6 489m (-5%) B Global Services EUR 5 719m (-2%) 3 Greater China EUR 2 165m (-14%) C A C IP Networks and EUR 5 719m (-0%) Applications 4 Latin America EUR 1 380m (+8%) 2 Nokia Technologies EUR 1 501m (+9%) 5 2 5 Middle East & Africa EUR 1 874m (-2%) 6 North America EUR 6 574m (+3%) B 3 Group Common and EUR 1 021m (-8%) 4 1 Other 3 1All Nokia Technologies IPR and Licensing net 1Includes net sales to other segments. sales are allocated to Finland. The fi gures are derived from our consolidated The fi gures are derived from our consolidated fi nancial statements prepared in accordance fi nancial statements prepared in accordance with IFRS. Year-on-year change is in with IFRS. Year-on-year change is in parenthesis. parenthesis.

Nokia People & Planet Report 2018 Nokia today Our approach Connectivity Environment Integrity People Together Key data Assurance 5 1.0 Nokia today

Year-end number of employees by region 2018

North America Other Finland Asia-Pacifi c European 13 393 countries 5 974 22 633 34 607

Year-end number of employees in 2018 101 203 Latin America Middle East & Africa China 2017: 102 761 2016: 100 875 4 243 3 843 16 510

Nokia People & Planet Report 2018 Nokia today Our approach Connectivity Environment Integrity People Together Key data Assurance 6 2.0 Our approach Our approach

Our sustainability vision remains to create the technology to connect the world, in a responsible way. Together.

Nokia People & Planet Report 2018 Nokia today Our approach Connectivity Environment Integrity People Together Key data Assurance 7 2.1 Letter from the President and CEO

Letter from the Businesses have responsibilities. Improving lives with technology We create the technology to connect the world. That To customers, of course. To shareholders and connection took a huge step forward at the end of President and investors, absolutely. But also to employees, to 2018 when the first commercial 5G networks went CEO society, and to the planet itself. live in the U.S. and Korea. More and more businesses are realising the Greater connectivity will soon usher in the Fourth importance of these responsibilities. They are making Industrial Revolution, which promises stellar gains their work more sustainable. But there is a long way in productivity and economic growth. But not only to go. Climate change is still happening. Inequality that: the technology that will revolutionize factories still exists. and workplaces will be of equal use in healthcare, in efficient agriculture, in smart power production. I want Nokia to be at the very forefront in addressing In other words, across the entire infrastructure of a these urgent challenges. Not only through the healthy and sustainable society. technology we create, but through the values we represent, and the working practices that we employ We are determined that these gains should not just across the breadth of our operations. be limited to certain countries or communities. They should be universal benefits. In order to gauge our progress, we benchmark ourselves against the globally-recognised standards Crucial to this aspiration is our work with Non- of the United Nations’ Sustainable Development Governmental Organizations (NGOs). For example, Goals and assess our performance against the in Indonesia we worked with the national Ministry of advanced level principles of its Global Compact. Health and UNICEF in order to deliver over 23 million vaccinations and 3 million anti-malaria bednets. This work is grouped into four areas: improving lives with technology, protecting the environment, The number of people to have directly benefitted conducting business with integrity, and respecting from our corporate community investments reached our people, and these activities are underpinned by 1.4 million in 2018. our collaborations with other key stakeholders.

Nokia People & Planet Report 2018 Nokia today Our approach Connectivity Environment Integrity People Together Key data Assurance 8 2.1 Letter from the President and CEO

Protecting the environment down our ethical business approach and explains how We run two career development programs for Like any type of infrastructure, connectivity can employees, suppliers and other stakeholders should talented women. 35% of those who complete these be resource-intensive. But that only makes it more contribute to it. schemes have moved on to higher level positions. important for companies like Nokia to reduce their In addition, we provide training for leaders and environmental impact wherever possible. The Code requires all employees to follow five managers on unconscious bias; almost 1 000 directives: obey laws and follow policies, be fair and employees received this training in 2018. We are investing heavily to make our portfolio the honest, treat each other with respect, declare conflicts most energy efficient in the world. That investment is of interest and avoid appearance of impropriety, We also support Greenhouse – a professional bearing fruit: our new radio networks use on average and report any concerns promptly. Alongside other women’s network – and StrongHer – an employee over 40% less energy than the ones they replace. tools, such as our Human Rights Due Diligence and network that aims to create more opportunities for And we have developed the world’s first commercially Nokia Supplier Requirements, this allows us to set women across Nokia – among other initiatives. deployed liquid cooled base station, which could high standards of transparency, ensure cast-iron data reduce CO2 emissions by up to 80% when emitted security, mitigate the risks of misuse of technology, Finally, I regret to say that a Nokia subcontractor lost heat is circulated around apartment buildings to and maintain responsible supply chains. his life in a fall last year. Any serious incident of this utilise heat that would otherwise go to waste. type is unacceptable. We will carry on trying to reduce Respecting our people accidents by providing best-in-class equipment, In addition, we have committed to decreasing our Telecommunications is a competitive sector. To training and supervision to avoid accidents. emissions from our own operations by 41% by 2030, succeed you not only need the best people – you compared to 2014 figures. We are on track to achieve need the best people to be empowered. Technology plays a huge and increasing role in all our this. In 2018 our facilities consumed less electricity lives. For us, that means that we have a responsibility and water, and emitted less greenhouse gas, than We have done well at this. Anonymous surveys show to act in a way that benefits people and the planet. they did in 2017, and we are targeting further that our employees value both our culture and the Not just through our products and services but reductions in 2019. direction of our business. Other metrics are equally through our values. pleasing: the number of paid hours that employees Conducting business with integrity spent volunteering more than doubled in 2018. Our These values have allowed us to be more ethical, This is the second year running that the Ethisphere work on LGBT+ and diversity is also going well. trusted and transparent than ever before. We should Institute has ranked us among the World’s Most all be proud of that – I certainly am, but we will also Ethical Companies. For us, ethics and integrity are But there is still more to do, on gender diversity in push forward to be even better. not a ‘nice to have’ but a fundamental part of our particular. business model. Warm regards, Just 22% of our employees are women. The At the core of this is our Code of Conduct, taken as percentage of female leaders is even lower. This is not Rajeev Suri training and acknowledged by every employee. It sets good enough and we are taking action to change it. Nokia President and CEO

Nokia People & Planet Report 2018 Nokia today Our approach Connectivity Environment Integrity People Together Key data Assurance 9 2.2 Sustainability highlights and challenges in 2018 Sustainability highlights in 2018

The challenges posed by climate our activities in 2018. In November calculated that over that period we have in 2017) of suppliers on EcoVadis with change grew ever more pressing with 2018, we were also acknowledged by saved as much electricity in total (by a satisfactory performance score. the release of The Intergovernmental the independent annual sustainability selling better products) as we use in one Although this is an improvement on Panel on Climate Change (IPCC) report report review, commissioned by FIBS, year at Nokia. 2017, we still have a lot of work to on global warming at 1.5°C, and we Finland’s leading non-profit corporate do to reach our 2020 target. 2018 We continued to drive the dialog forward are pushing even more strongly ahead responsibility network for our reporting was also the first year of active in business and human rights. In 2018, with our environmental programs and in 3 categories including winning engagement with our suppliers on the we undertook a Human Rights Impact activities. In early 2019 we announced Finland's report of the year for the first efficient use of water. Furthermore, Assessment (HRIA) of our business in the first commercial liquid cooled base time. See more of our recognitions at 100 percent of suppliers delivering terms of the most salient human rights station site with the Finnish telecom www.nokia.com/about-us/who-we-are/ high risk activities were covered by H&S risks arising from the potential misuse operator Elisa. The solution can reduce our-awards. maturity assessments. Read more in the of the products and technology we CO2 emissions by up to 80 percent Responsible sourcing section. Our products in use create the greater provide. The HRIA was conducted by an and recapture wasted heat to feed into part of our carbon footprint and we external human rights expert and will In 2018, around 304 200 (254 100 in the heating system for the apartment again helped customers around the help us identify areas for improvement. 2017) lives were improved through building. This work is just one way to world to reduce that footprint. In 2018, It will also provide preparation for the our corporate community investment reach our science based long-term we delivered zero emission products Global Network Initiative’s human rights programs, and cumulatively between targets. Read more in the Protecting the to over 140 customers globally and assessment in the first half of 2019. 2016 –2018, around 1 426 600 people environment section. the customer base-station sites we Read more in the Addressing human have already directly benefitted from We were again recognised by a number modernized used on average 43% less rights section. our programs. of independent organisations for our energy (44% in 2017) than those where Our supply chain is long and complex, work in sustainability. At a time when our customers did not modernize. Read and we work with our suppliers in calls for greater integrity and ethical more in the Protecting the environment improving Environmental, Social and business behaviour are growing, we section. Governance (ESG) issues and promoting were again recognized by the Ethisphere From the time we began to calculate transparency and collaboration. We Institute as one of 2019’s World’s the impact of modernization on energy carry out audits and assessments, and Most Ethical Companies based on use (around 3–4years ago), we have in 2018, we had 74 percent (71 percent

Nokia People & Planet Report 2018 Nokia today Our approach Connectivity Environment Integrity People Together Key data Assurance 10 2.2 Sustainability highlights and challenges in 2018 Sustainability challenges in 2018

In 2018, there was one fatal incident In our own operations the share of (four in 2017), resulting in the death landfilled waste increased significantly of one (five in 2017) contractor/ (from 20% to 52%) and we need to work subcontractor employee while carrying hard to decrease this. Improvements out work on our behalf. The accident in how we estimate waste for non- was related to work at height. Any such reporting sites is the main reason for serious incidents while working for Nokia this significant increase. are unacceptable. In 2018, we had 15.3% women in We have zero tolerance for the use leadership positions, disappointingly of forced or child labor, or any form down from the 2016 baseline of 15.5%. of modern slavery. In 2018 calls for We continue working, within our gender increased supply chain transparency balance action plan, towards the 2020 grew stronger and we must ensure we target of increasing the percentage of keep training and collaborating with women in leadership by 25%. our suppliers to avoid the types of labor issues and other related concerns explained in this report under the Responsible Souring section.

Nokia People & Planet Report 2018 Nokia today Our approach Connectivity Environment Integrity People Together Key data Assurance 11 2.3 Our sustainability priorities and impacts

Our Our core business is connectivity Our priorities and related activities, and we aim sustainability to deliver our technology in a priorities and responsible way, where purpose and Improve people’s lives sustainability are an integral part Create and deliver technology solutions and products that connect people and things. impacts Our sustainability-related products and services will help people thrive and live better of how we operate and what we and healthier lives on a cleaner planet. This is the core of our business. provide. We take the responsibility for the impact we have globally, Protect the Conduct Respect our both positive and negative, in order environment our business people to make a positive difference in with integrity people’s lives and to the planet. • Help customers reduce energy • Uphold the highest principles • Provide fair and just labor Our greatest impact in accelerating the realization of use and emissions of business ethics and conditions in own operations the United Nations Sustainable Development Goals • Increase product energy corporate governance • Maintain health & safety as (SDGs) remains in the development and delivery of efficiency, develop product eco- • Tackle issues related to privacy, a priority our technology that connects people and things; design, and manage materials data security, and potential • Foster employee satisfaction, improves lives by providing access to education; • Reduce environmental impact technology misuse engagement, and development information, better healthcare, and opportunity; and of our operations (emissions, • Ensure suppliers meet our high • Strive for greater diversity, may enable a safer, healthier planet. The technology waste, resources) ethical, labor, and environmental inclusion, and anti-discrimination we provide can create a more equitable society by standards connecting the unconnected.

Collaboration is paramount in creating the greatest impact on the sustainability challenges of our Make change happen together time. There is power in joining together to create shared value. No single company, organization or Engage actively with our stakeholders to contribute to global efforts towards a more sustainable, government can solve the challenges alone, but socially responsible world technology and connectivity will continue to play an ever-increasing role in creating a better world for all.

Nokia People & Planet Report 2018 Nokia today Our approach Connectivity Environment Integrity People Together Key data Assurance 12 2.3 Our sustainability priorities and impacts

Global macro trends impacting our growth possible and concluded that four physical sustainability approach networked technologies, all widely diffused and Key global macro trends that impacted our working together, made the difference in the past. sustainability approach in 2018 were identified as The technologies were in energy, transportation, technology with a purpose, the growing demands health and sanitation, and communication networks. for improved privacy, data security and protection Digitalization will play a key role in reducing against cybercrime, the need for business integrity, poverty, increasing industrial efficiency, improving transparency and ethical behavior, the fight against human wellbeing in an equitable way, reducing climate change and sustainable use of natural environmental damage and provide better methods High ethics and transparency resources, and the importance of attracting and of managing scarce resources. Development in many countries is restricted retaining talent. New developments during the year by corruption, unethical behavior, and a lack of such as societal changes have further emphasized a Privacy and data security respect for human rights and acceptable labor number of these trends and the importance in our As the digital transformation of life touches everyone conditions. Increased regulation on the need for sustainability work. and changes the way we live, work and play, the greater transparency are growing. Non-financial potential risks of these massive changes and the use sustainability reporting requirements continue The human potential of technology of technology are in constant discussion. Over 2018, to increase. Our unyielding integrity is our most Our strategy reveals the following global technology there has been more debate on automation and the important asset. By upholding our high standards of related megatrends: network, compute and storage, changing nature of jobs, the use and potential misuse integrity internally and in our supply chain, we can IoT, augmented intelligence, human and machine of AI and the impact on society of smart devices make a positive difference. interaction, social and trust economics, and when everything and everyone is connected. digitalization and ecosystems. Climate change and the sustainable In 2018 we have seen growing concerns around use of natural resources Our technology expertise, breadth of portfolio and the issue of privacy as the amount of sensitive and Climate change and its effects remain the biggest ability to connect people and things puts us in an personal data grows exponentially on networks. As global challenge. During 2018 concern about the excellent position to play our part in addressing more IoT and smart devices become connected, likelihood and impacts as well as the urgency and today’s global challenges with the UN Sustainable data and cyber security concerns increase. Debate magnitude of the needed actions became even Development Goals as our North Star. has increased on the vulnerability of information more evident. While minimizing impacts from our systems, data fraud and theft, breakdowns in critical own operations, we also have the opportunity to Our customers’ networks served 6.1 billion information systems and the misuse of technology. help our customers meet the growing demand for subscriptions worldwide by the end of 2018. Technology designed to mitigate these risks and communications in an environmentally sustainable Connectivity in itself enables increased productivity thwart those who misuse technology is a necessity. way. We design products and services that are more and potential for economic growth. Nokia Bell Our design for privacy, security solutions and due energy efficient, encouraging the use of renewable Labs have looked at the elements that combined diligence processes to avoid misuse help to ensure energy, and helping our customers and other to make earlier major gains in productivity the benefits of the technology will be enjoyed by all. industries reduce their impact.

Nokia People & Planet Report 2018 Nokia today Our approach Connectivity Environment Integrity People Together Key data Assurance 13 2.3 Our sustainability priorities and impacts

Societal changes Increasing urbanization and aging will put pressure on existing infrastructure and create demand for new solutions. At the same time, economic and political polarization and nationalism (countries increasingly focusing on their own interests) will challenge all – economic, social and environmental aspects of sustainability. Connectivity and technology can help manage and solve societal challenges and enable freedom of expression and opinion when technology is used for its intended purpose.

Attracting and retaining talent Attracting, keeping, and motivating the best talent is key to business success and the market for skilled employees in our business remains extremely competitive. We continue to build a motivational corporate culture that provides equal opportunity and fosters innovation and continuous learning. A company that leads in profit with purpose will attract new talent as sustainability becomes one of the key criteria for potential employees.

Materiality We continue to focus our corporate responsibility activities on the most material topics in relation to our business and the impact on sustainable and market trends, international sustainability In 2017, we finalized the review and update of development. We identify our material topics based frameworks, our value creation analysis and the our materiality analysis, completing interviews on a combination of the factors which include our UN Sustainable Development Goals. We look at our with a broad range of stakeholders, both internal strategy and vision, risks and opportunities, feedback activities in terms of the shared value that we can and external. The analysis was reviewed by Nokia from stakeholder interaction, customer and legal create to maximize positive impacts and minimize Responsibility Council, Board of Directors, and by requirements, our Code of Conduct, both macro negative ones. external sustainability experts. We plan to make the

Nokia People & Planet Report 2018 Nokia today Our approach Connectivity Environment Integrity People Together Key data Assurance 14 2.3 Our sustainability priorities and impacts

Our sustainability: Impact on business success and sustainable development

next review and update of our materiality analysis by High the end of 2019. Sustainability Connecting People and related products Based on the outcomes of the assessment and and services Things review, we concentrated our efforts on the benefits

Product energy Ethical business of connectivity and sustainable products, and effi ciency and practices and environmental impact and climate change challenges. corporate governance GHG emissions We work hard to ensure ethical business practices Labor conditions Nokia’s direct economic and support the increasing need for data privacy and of suppliers impact (tax and other freedom of expression, supply chain responsibility and partners payments to stakeholders) Health and safety and transparency, health & safety, and employee engagement as well as increased diversity. Privacy and data security Labor conditions The materiality map shows the 20 most material in own operations Preventing product misuse topics and their relevance to sustainable Materials’ traceability development and our business success. For more and confl ict minerals Diversity, inclusion, details on aspects of our materiality, the process as Improving lives with technology and anti-discrimination well as key business and sustainability drivers, visit Employee our website. Energy use and Energy use and GHG satisfaction, GHG emissions in Protecting the environment emissions in own engagement, and supply chain operations Sustainable development product design Respecting our people and materials Waste and water in Management and Conducting our business with integrity supply chain prevention of environmental pollution

Waste and water in own E-waste All the topics shown in this diagram are operations important in our responsibility work. Those in the top right corner of the diagram are most important to our business and Impact on sustainable development Impact on sustainable development sustainable development. Impact on Nokia business High

Nokia People & Planet Report 2018 Nokia today Our approach Connectivity Environment Integrity People Together Key data Assurance 15 2.3 Our impact and influence on sustainable development throughout the value chain

Our impact We have a long and complex We were one of the first companies to join. The communications technology exceeds the negative value chain where we are able to Upright Project, which looks at value creation impacts of our own operational activities, for and influence analyses and methodologies with several companies example, by enabling other industries to become positively influence sustainable and organizations. more energy efficient. on sustainable development in many ways. In the Upright model, the negative and positive It is generally a challenge to value impact and then For more on our impact and value creations with monetary values are analyzed convert it into euro equivalents. The approach of the development and shown in five main dimensions: economic, Upright Project was to grasp the scale of different influence on our value chain visit environmental, health, social and knowledge. Each of impacts rather than try to measure each one throughout the our website. these dimensions is divided into several impact areas. accurately. value chain The conclusions for the 20 impact areas, shown in the chart on the next page, are from The Upright Value creation Project, and estimations are based on public data In recent years, a variety of stakeholders have become and various assumptions. For example, in the increasingly interested in understanding the overall economic area, the values of paid salaries and quantified positive and negative impacts of companies taxes are based on reported euro values, and in on the environment, the economy, and society. the environmental area, the Nokia reported GHG emissions, water usage and waste figures are We have been one of the forerunners in this value converted by Upright into euro figures using sources creation thinking. For example, we participated in such as the Kering E P&L, carbon tax country- Aalto University's CEMS program in Finland, which specific pricing, and global water tariff averages. carried out an extensive analysis of Nokia’s positive and negative social, environmental, and economic The analysis was completed by The Upright Project impacts throughout the value chain in terms of in early 2018 and reviewed by both the Nokia monetary value, to the extent possible. We also Responsibility Council and the Board. Based on presented some of our value chain impact analysis the analysis our main impacts were shown to be in our previous People & Planet report. Moreover, related to our network technology. It brings major the conclusions of our materiality analysis and net positive impact through knowledge creation sustainability related risks and opportunities in our (information infrastructure and related innovations), enterprise risk management system are also to some economic benefits and job creation throughout extent based on the analysis of our positive and the value chain. Moreover, the project showed that negative impacts in terms of monetary value. in environmental issues, the positive impact of

Nokia People & Planet Report 2018 Nokia today Our approach Connectivity Environment Integrity People Together Key data Assurance 16 2.3 Our impact and influence on sustainable development throughout the value chain

9 main impacts found for Nokia by Upright value creation model

€ billion equivalents 2016

Taxes (0.5 + VAT)

Scarce human Jobs (3.6) Downstream economic value (6–17) capital (-3) Economy GHG saving potential from energy Internal & upstream eﬃ cient products (0.9–2.5) emissions (0.2) Product use GHG Water (<0.1) saving potential emissions (2.3) from connectivity Environment GHG saving potential from connectivity (0.9–2.5)

Health

Ethics Proactive ethics improvements in risks the industry

Internal and Social partner training

Information infrastructure (6–17) Innovation (1–5) Knowledge

Negative Positive

Note that this is a rough estimation by The Upright Project based mostly on public data, Main impacts May be signifi cant Small impacts assumptions and conversions to euro equivalents. Chart is based on data available from 2016. The idea is to grasp the scale of diff erent impacts rather than measure each one accurately.

Nokia People & Planet Report 2018 Nokia today Our approach Connectivity Environment Integrity People Together Key data Assurance 17 2.3 The UN Sustainable Development Goals and our business

The UN In 2018, we increased our work and commitment Improving people’s Protecting the Conducting our Respecting our people Making change towards contributing to the 17 ambitious lives with technology environment business with integrity in everything we do happen together Sustainable Development Goals (SDGs) adopted by Sustainable the United Nations Assembly in 2015. We further evaluated the relationship between the SDGs and Development our business, sustainability focus areas, materiality analysis, targets and the support we can provide Goals and our in reaching these goals. This relationship has also been presented to our Board of Directors and the business leadership team.

In 2018 we reviewed our SDG approach using the Practical Guide on Integrating the SDGs into Corporate Reporting, developed by the UN Global Compact and GRI (published in August 2018). As described in the Guide we have: • defined priority SDGs, related targets and report content • set business objectives and targets accordingly • implemented/continue implementing defined actions • collected, analyzed and reported activities and performance related data

We have also reviewed other best practices such as GRI and UN Global Compact SDG Compass when reporting on the SDGs. In 2018 our SDG reporting The technology and the solutions we invent, create, in which we can have the greatest impact. Beyond was recognized as the best in Finland's independent and deliver can potentially contribute to every goal. these, we believe the technology we produce can annual sustainability report competition. The illustration highlights our strategic sustainability positively contribute to all 17 UN SDGs. priority areas and how they correlate to the SDGs. During the year we also renewed our commitment We aim to further integrate the SDGs into our In addition to the analysis of the 17 SDG Goals, to the Finnish Commitment2050 (Sitoumus2050) sustainability strategy, programs, and activities. we have also identified the most material of the program and reported the progress of our target 169 SDG Targets for Nokia. These key targets have to connect the next billion. Read more about the The four goals on the next page are the most been incorporated into sections of this report where program at www.sitoumus2050.fi/en. material for our business and emphasize the areas we address our performance against the Targets.

Nokia People & Planet Report 2018 Nokia today Our approach Connectivity Environment Integrity People Together Key data Assurance 18 2.3 The UN Sustainable Development Goals and our business

Improving Protecting the Conducting our business Making change people’s lives with environment with integrity and happen together technology Respecting our people in everything we do

Goal 9: Build resilient infrastructure, promote Goal 13: Take urgent action to combat climate Goal 8: Promote inclusive and sustainable Goal 17: Revitalize the global partnership for sustainable industrialization and foster innovation. change and its impacts. This is the most material economic growth, employment and decent work sustainable development. In our collaboration with This is the most material SDG for us in the area of goal from an environmental perspective for us. Our for all is the most material development goal for stakeholders, our activity is directly aligned with improving people’s lives with our technology. It is environmental activities clearly support this goal. both Conducting our business with integrity and Goal 17. We understand we cannot achieve a more directly linked to our core business of delivering We do our utmost to help combat climate change. Respecting our people in everything we do. At the sustainable world on our own. We collaborate with a technology innovation and network infrastructure The equipment and technologies we create have end of 2018, we had around 101 000 people globally, broad range of stakeholders on the key challenges and services that improve lives. Our core business a positive impact on the world through the innate while through our supply chain of some 14 000 and opportunities of building a responsible business. also allows us to contribute to all other goals. People, benefits of connectivity and digitalization, but our suppliers, we continued to create greater business Our collaborations reflect both our business need devices, sensors, vehicles, objects – all connected, products in use in our customers’ networks create and employment opportunities beyond our own and our desire to do the right thing. We work with our opening up a world of opportunity for all. According the majority of our carbon footprint. It is imperative employee numbers. customers, suppliers, other industries, enterprises, to GSMA, the number of Internet of Things (IoT) we continuously find ways to improve the energy organizations, authorities, and NGOs. connections (cellular and non-cellular) will increase efficiency and power consumption of our products, We conduct our business in accordance with more than threefold worldwide between 2017 and and work to drive up the use of renewable energy internationally recognized ethical and responsible In 2018, we engaged with stakeholders to enhance 2025, reaching 25 billion. The technology we provide sources in our solutions. business practices. We require the same high standards the use of technology for the good of people and the can help make our planet safer, healthier, more of our suppliers. Health and safety remained a key planet. We worked with NGOs and other organizations sustainable, more efficient, and more productive. It Our operations are a small part of our total carbon priority for our own employees and our supply chain, to provide access to education, improve connectivity can positively influence every aspect of the human footprint, but we drive many internal environmental and we are committed to a diverse workforce that for rural communities, increase public safety, experience. programs, as well as initiatives as part of the product reflects the gender and diversity balance of the real and to empower girls and women. Additionally, life cycle process. We also work on decreasing the world. An employee mix of women and men from our collaborative activities promote inclusive and In 2018 we delivered products and services that energy, waste, water and other resources used in our different age groups enriches our company and is one sustainable economic growth, employment and brought secure innovations and connectivity for operations, and offer refurbishment and recycling reason we invest in encouraging women and girls into decent work for all, and they reduce inequality within public safety, mission-critical communications, and services for old telecom equipment. STEM education. We foster programs that develop and and among countries. For more information on healthcare and wellbeing, as well as automation nurture talent. Read more on pages 120 –146 under some of our programs and projects with different solutions to enterprises driving efficiencies in In 2018, we continued to achieve some excellent the Respecting our people section. stakeholders in 2018, see the Making change happen operations; we also connected the unconnected environmental performance results in our own together section on pages 146 –164. with our customers through our network solutions: operations. We also launched new products that In 2018 we emphasized key areas in human rights, improving access to education, economic help our customers decrease energy use, emissions, ranging from freedom of expression, through to To see more examples of how we can support all opportunity and health care. Read more on pages and space requirements, while increasing material increased dialog on combatting modern slavery, 17 SDGs visit our website. 42–53. efficiency. Read more about our environmental increasing our work with our supply chain, to working activities on pages 54–82. harder on conflict minerals issues. Read more on our achievements and challenges on pages 26–29 under the Conducting business with integrity section.

Nokia People & Planet Report 2018 Nokia today Our approach Connectivity Environment Integrity People Together Key data Assurance 19 2.4 Our sustainability targets and performance

Our The table on the following page By the end of 2018, of the 39 short-term provides the status of our 39 long- and long-term targets: sustainability and short-term targets, linked to 10 targets for 2018 were achieved and 5 were not achieved. targets and our most material topics. It includes a short description of the related 15 of the 24 longer term targets were performance ongoing/on track, while 4 were ongoing/ performance and achievements not on track and 2 were achieved and 3 for each. We also specifically set not achieved. and received acceptance of the 4 of these targets were not achieved as targets including our science- the Digital Health products business was based targets on carbon emissions divested. both for our products in use and We also set 10 new targets for 2019 and for our operations. We were the beyond. first major telecoms vendor to set these targets, showing our true commitment to take action in the fight against climate change.

Nokia People & Planet Report 2018 Nokia today Our approach Connectivity Environment Integrity People Together Key data Assurance 20 2.4 Our sustainability targets and performance Our commitments, targets, and performance Priority area Material topic Targets Achievements 2018 Status

Improving people’s lives Connecting People and Things 2022 At the end of 2018 the radio networks we delivered with technology Helping our customers to connect the next billion measured by to our customers served around 6.1 billion the number of subscriptions in Nokia radio customers’ networks subscriptions worldwide, compared to around 5.5 and by the number of fixed network lines shipped to our billion at the end of 2016. Assured Ongoing – on track customers.

Sustainability-related products 2018 Since the target was set in 2016, we have established and services 2-3 Nokia Saving Lives solution kits provided and supported three kits out of which one was partially funded by Nokia and used by selected partner organizations in the by GSMA. In 2018 one in the Philippines for the humanitarian field, proving that Nokia technology saves lives. exclusive use of the Red Cross, an earlier one in Germany for Rapid response cases, and one as a Achieved spare kit in case of replacements, new developments and for remote support.

NEW target 2019: Establishment of a global rapid response team that can quickly respond in case of disasters.

NEW target 2019: Establishment of further international relationships with rescue forces and potential funds, so that Nokia Saving Lives can be deployed in a similar mode to other teams as done for the Philippine Red Cross.

2025 In 2018, our corporate and key regional community Improve the life of 2 000 000 persons through our corporate and investment programs had around 304 200 direct key regional community investment programs (baseline 2016), beneficiaries. Since the baseline, already around Ongoing – on track focusing our action on gender balance, education and health and 1 426 600 people have benefitted from our on how Nokia products and services improve people’s lives. programs. Assured

Nokia People & Planet Report 2018 Nokia today Our approach Connectivity Environment Integrity People Together Key data Assurance 21 2.4 Our sustainability targets and performance Our commitments, targets, and performance Priority area Material topic Targets Achievements 2018 Status

Improving people’s lives Sustainability-related products 2018 In the first half of 2018, as a continuation of our with technology and services Ensure participation of all Nokia employees in corporate health three employee wellness challenges in 2017, we programs to reduce the incidence of cardiovascular disease. organized a “Relay for Health” step challenge globally, with over 1200 employees participating. In 2018 Nokia divested its dedicated health device Not achieved business and therefore discontinued the follow-up of this measurement, though we continue to roll out a successful employee wellbeing program.

2020 As Nokia sold its dedicated health devices business Support the extension of remote patient monitoring of chronic in 2018, this target was discontinued. We continue to diseases by rolling out patient care solutions using Nokia devices supply network solutions to the healthcare industry. Not achieved to over 100 000 patients.

2020 As Nokia sold its dedicated health devices business Reduce the rate of uncontrolled hypertension from an average in 2018, this target was discontinued. We continue to 50% of hypertensive adults to less than 10% among the Nokia supply network solutions to the healthcare industry. Not achieved wireless blood pressure user community.

2020 As Nokia sold its dedicated health devices business Ensure integration of data from smart health devices into all in 2018, this target was discontinued. We continue to major electronic health records accessible to doctors. supply network solutions to the healthcare industry.

Not achieved

Nokia People & Planet Report 2018 Nokia today Our approach Connectivity Environment Integrity People Together Key data Assurance 22 2.4 Our sustainability targets and performance Our commitments, targets, and performance Priority area Material topic Targets Achievements 2018 Status

Protecting the Product energy efficiency and 2030 Scope 3 emissions included in SBT are on target. environment GHG emissions GHG reduction of 75% compared to the 2014 baseline (scope 3, Assured use of sold products) (This target is accepted by Science Based Target initiative). Ongoing – on track

Energy use and GHG emissions 2018 27% of our total purchased electricity was from in own operations Achieve at least 25% utilization of renewable electricity, renewable sources. Assured compared to total purchased electricity.

Achieved

NEW target 2019: At least 30% utilization of renewable electricity, compared to total purchased electricity.

2018 Electricity consumption across our facilities Achieve a facility electricity usage reduction of 3%, compared to decreased by 3% as compared to 2017. Assured 2017 level. Achieved

NEW target 2019: Facility energy usage reduction of 3%, compared to 2018 level.

Nokia People & Planet Report 2018 Nokia today Our approach Connectivity Environment Integrity People Together Key data Assurance 23 2.4 Our sustainability targets and performance Our commitments, targets, and performance Priority area Material topic Targets Achievements 2018 Status

Protecting the Energy use and GHG emissions 2018 GHG emissions from facilities decreased by 18% as environment in own operations GHG emission reduction of 1.8% from facilities, compared to compared to 2017. Assured 2017 level (Scopes 1+2). Achieved

NEW target 2019: GHG emission reduction of 3% from facilities, compared to 2018 level (Scopes 1+2) .

2030 Scope 1&2 emissions included in SBT are on target. GHG emission reduction of 41%, compared to the 2014 baseline Assured (Scopes 1+2). (This target is accepted by the Science Based Ongoing – on track Target initiative).

Energy use and GHG emissions in 2020 In 2018, 187 of our suppliers had emission reduction supply chain 180 suppliers setting emission reduction targets. targets in place via CDP Supply Chain program. Assured Achieved

2018 Due to delays in CDP's assessment cycle in 2018 for 90 dedicated one-to-one reviews with suppliers, collaborative all of its clients, the 2018 reviews were postponed to emission reduction projects. 2019. Not achieved

NEW target 2019: 90 dedicated one-to-one reviews with suppliers, collaborative emission reduction projects.

Nokia People & Planet Report 2018 Nokia today Our approach Connectivity Environment Integrity People Together Key data Assurance 24 2.4 Our sustainability targets and performance Our commitments, targets, and performance Priority area Material topic Targets Achievements 2018 Status

Protecting the Waste and water in own 2018 Water use decreased by 22% compared to 2017. environment operations Reduce the water use in our facilities by 2% compared to 2017. Assured

Achieved

NEW target 2019: Reduce the water use in our facilities by 1% compared to 2018.

NEW target 2019: Recycle at least 60% of facility waste.

NEW target 2020: Recycle at least 75% of facility waste.

Waste and water in supply chain 2018 In 2018 we conducted a Water Assessment Program Deployment of non-carbon related projects with suppliers. with 150 suppliers engaged and assessed via CDP Water Program. In addition we also conducted a pilot study for recycled materials content among our Achieved components suppliers.

Nokia People & Planet Report 2018 Nokia today Our approach Connectivity Environment Integrity People Together Key data Assurance 25 2.4 Our sustainability targets and performance Our commitments, targets, and performance Priority area Material topic Targets Achievements 2018 Status

Conducting business Ethical Business Practices and 2020 Progress of this target is measured with a question with integrity Corporate Governance Employee/Line Manager engagement on importance of ethics in our anonymus employee survey (CCT) "Does your and compliance. 75% favorable answers targeted. line manager periodically talk with you and your team members about the importance of ethics Achieved and compliance?" In 2018 77% (72% in 2017) of responding employees gave a favorable response. 2030 Employee/Line Manager engagement on importance of ethics and compliance. 85% favorable answers targeted. Ongoing – on track

2018 The training was completed by 95 % of Nokia Ethical Business Training (EBT) completion: 95%. employees. Assured

Achieved

2020 EBT completion: 98%.

Ongoing – not on track

2030 EBT completion: 100%. Ongoing – not on track

NEW target 2020 (to replace the 2020 and 2030 targets): Ethical Business Training (EBT) completion: 95%.

Nokia People & Planet Report 2018 Nokia today Our approach Connectivity Environment Integrity People Together Key data Assurance 26 2.4 Our sustainability targets and performance Our commitments, targets, and performance Priority area Material topic Targets Achievements 2018 Status

Conducting business Privacy and Data Security 2020 Protection of critical information ecosystems on with integrity Our aim for 2020 is that Nokia be recognized as an industry target level, 95% of identified critical and high audit leader in security and privacy. This will be assessed through findings closed. Employee engagement with security external benchmarking. culture program clearly above targets. Ongoing – on track

Preventing product misuse 2018 Human Rights Impact Assessment for the Nokia Conduct a formal Human Rights Impact Assessment for the new product portfolio was conducted with an externally Nokia product portfolio with an externally verified expert. verified expert between July 2018 and March 2019. Achieved

2019 Preparation for the GNI assessment was started in Successful completion of the first GNI assessment. late 2018 and will be completed by October 2019.

Ongoing – on track

2020 In 2018 we continued our strong Human Rights Nokia as externally recognized leader in vendor related issues in Due Diligence (HRDD) program to mitigate potential freedom of expression and right to privacy according to external misuse of technology to limit freedom of expression benchmarking, e.g. Ranking Digital Rights. and privacy. We published further anonymized cases Ongoing – on track in this report and continued to engage in stakeholder dialog through speaking and other events.

Nokia People & Planet Report 2018 Nokia today Our approach Connectivity Environment Integrity People Together Key data Assurance 27 2.4 Our sustainability targets and performance Our commitments, targets, and performance Priority area Material topic Targets Achievements 2018 Status

Conducting business Labor conditions / suppliers 2020 74% suppliers achieved a satisfactory EcoVadis score with integrity and partners Comprehensive supplier sustainability risk mitigation (90% of (71% in 2017) and we conducted 75 on-site audits (72 in 2017). Assured suppliers assessed with Satisfactory Sustainability Score and 100 Ongoing – not on track on-site audits conducted per year).

2020 Nokia Ethics Helpline enables capturing supplier Establish supplier worker empowerment program (enabling grievance. Channel is communicated to suppliers at Suppliers Corporate Responsibility Workshops. trainings on NokiaEDU and Worker Tollfree Helpline). Ongoing – on track

2020 (The same percentages are valid both Achieve full traceability to the smelters in our supply chain and for Mobile Networks and Nokia Group). their conflict-free status (Nokia Group). Ongoing – on track

Nokia People & Planet Report 2018 Nokia today Our approach Connectivity Environment Integrity People Together Key data Assurance 28 2.4 Our sustainability targets and performance Our commitments, targets, and performance Priority area Material topic Targets Achievements 2018 Status

Conducting business Health, Safety, and Wellbeing 2018 100% of suppliers delivering high risk activities were with integrity 100% of all suppliers delivering high-risk activity to be assessed covered by H&S Maturity Assessments. Assured using Nokia H&S Supplier Maturity Assessment Process. Achieved

2020 We are first focusing on getting 100% of suppliers 50% of suppliers delivering high risk activity to meet or exceed to “compliant”-level (score 3/5; 89% of suppliers in “H&S preferred supplier” status. 2018) Assured and concentrating then gradually to “preferred”-level (score 4/5). Ongoing – on track

2030 We have an active program ongoing, please see 100% of supplier delivering high risk activity to meet or exceed comments on 2018 and 2020 targets. “H&S preferred supplier” status. Ongoing – on track

Nokia People & Planet Report 2018 Nokia today Our approach Connectivity Environment Integrity People Together Key data Assurance 29 2.4 Our sustainability targets and performance Our commitments, targets, and performance Priority area Material topic Targets Achievements 2018 Status

Respecting our people in Employee satisfaction, 2020 In 2018 we continued to measure the favorability of everything we do Engagement and Development Sustained focus on CEO-sponsored Nokia Culture Principles. employee perceptions with an anonymous employee survey (CCT). The two CCT target question scores (company direction = 80 percent, culture direction = 79 percent) remain in the green, albeit the average Ongoing – on track for % favorability for these two CCT target questions was 2% down from 2017. Assured

2020 Nokia Location Development (LD) is the global Nokia to be the employer of choice (in our size) for all of our program aiming for every location to be recognized major hubs in locations around the world and become the best locally as Employer of Choice and Hub of Innovation. regarded employer in our industry globally. LD covers location specific improvement actions. Locally, volunteers from each Nokia organization

team up as one team to make it happen, The Ongoing – on track Location Head is the project leader. The program focuses on: Local Attractiveness, Local Best Employee Experience and Engagement, Ensuring One Nokia culture across Business Group and across functions locally.

2020 Guidance to all employees on volunteering is Foster the spirit of employee volunteerism across the company provided through our Volunteering guidelines. and increase their engagement. In 2018, our employees contributed around 18 500 hours of volunteering in paid working time, significantly up from 7 500 in 2017. In 2019 we look forward to encouraging and supporting more local Ongoing – on track programs around the world where our employees volunteer.

Nokia People & Planet Report 2018 Nokia today Our approach Connectivity Environment Integrity People Together Key data Assurance 30 2.4 Our sustainability targets and performance Our commitments, targets, and performance Priority area Material topic Targets Achievements 2018 Status

Respecting our people in Employee satisfaction, 2018 Initiative was cancelled. No new engagement model everything we do Engagement and Development Introduction of the renewed Employee Engagement model with is going to be introduced. increased frequency and depth. Not achieved

Diversity, inclusion and anti- 2020 In 2018, we had 15.3 percent women in leadership discrimination Increasing the percentage of women in leadership by 25 percent positions, down from the 2016 baseline of 15.5 (baseline 2016). percent. We continue working, within our five-year gender balance action plan, towards the 2020 target. Assured

Ongoing – not on track

Nokia People & Planet Report 2018 Nokia today Our approach Connectivity Environment Integrity People Together Key data Assurance 31 2.4 Our sustainability targets and performance Our commitments, targets, and performance Priority area Material topic Targets Achievements 2018 Status

Making change happen Corporate community 2018 In 2018, 99.8% of the global and key regional together investment 100% of corporate community investment activities aligned with contributions supported our three strategic CCI our Group-wide strategy, business drivers and SDGs. themes and when the local programs are included, 95% of our total contributions were aligned to the three thematic priorities. The CCI themes are aligned Not achieved with our business drivers and SDGs.

2018 All identified global and key regional programs were 100% of corporate community investment programs to be measured against a monitoring and evaluation measured against a monitoring and evaluating system. system in line with the LBG methodology.

Achieved

Nokia People & Planet Report 2018 Nokia today Our approach Connectivity Environment Integrity People Together Key data Assurance 32 2.5 Managing sustainability

Managing Sustainability and corporate Our Code of Conduct provides our requirements and the results of our value creation analysis. The Board responsibility issues are reviewed guidance for all employees. The Code is supported of Directors also approved the Corporate Community sustainability by policies and management systems related to Investment and University donations budgets for regularly at all levels of the responsibility issues. Our aim is to ensure that the year 2019, and had cybersecurity/information social and environmental matters are considered in security, ethics & compliance and privacy updates. company. We have built strong everything we do. Our key corporate responsibility governance structures and policies are regularly updated and can be found online. The Board of Directors Review of Nokia 2018 Annual Accounts also includes non-financial information processes to manage good ethical The highest decision-making body in our company which was also reviewed by the Board of Directors’ business practices and corporate after the General Meeting of shareholders is the Board Audit Committee. The Audit Committee also received of Directors. In 2018, the Board of Directors reviewed an annual update on conflict minerals, ethics & responsibility. our corporate sustainability status including targets, compliance, and internal audit and controls reviews. performance, achievements, and challenges as well as The Board of Directors’ Personnel Committee Our sustainability governance

Nokia Board Nokia Group Leadership Responsibility Corporate Subject-matter experts of Directors Team (GLT) chaired by the Council responsibility within business units and President and CEO extended team all our employees • Annual review of sustainability • Reviews and approves • Definesstrategyandassesses • Develops framework to outline • Ensure responsibility across activities and feedback sustainability related policies, materiality our priorities, targets, and the business strategy, targets, performance • Ensures cross-functional policies • Respect our values and our and the annual sustainability alignment and advocacy • Helps implement processes Code of Conduct Board Committees* report • Quarterly meetings and activities to achieve • Audit committee • Othertopicspecificreviews environmental and social and feedback when needed targets • Personnel committee

Committees with GLT participation*

Ethics and compliance offi ce

Provides training and supports employees in making decisions that are ethical, * See more about the main committees with sustainability related legal, and consistent with our values. Investigates any concerns about potential roles in the text above and in the following page. breaches of our Code of Conduct.

Nokia People & Planet Report 2018 Nokia today Our approach Connectivity Environment Integrity People Together Key data Assurance 33 2.5 Managing sustainability

received culture, demography, and diversity updates, and reviewed the results of the Nokia Culture Cohesion Tracker survey in 2018.

The Nokia Group Leadership Team is chaired by the President and CEO. The Leadership Team reviews and approves sustainability related policies, strategy, targets, performance and the annual sustainability report and reviews also other sustainability related topics when needed. Nokia governance meetings and committees where Group Leadership Team members participate and where sustainability related topics are frequently reviewed include for example the Compliance meeting, the Security meeting, the Diversity Steering committee, the Sponsorship and Donations Committee, and Human Rights Due Diligence governance council.

In 2018, our Chief Marketing Officer in Marketing and Corporate Affairs was responsible for corporate responsibility at the executive management level. During the year, corporate responsibility related business targets either in business operations or as • violation of ethical standards, including our Code topics were reviewed during CMO management team an integral part of strategy and financial planning of Conduct monthly meetings. and those cover strategic, operational, financial • labor unrest and strikes and hazard risks. The most important risk factors, • inability to retain, motivate, develop and recruit More information about our corporate governance together with the principal factors and trends appropriately skilled employees practices is available in our annual reports and on our affecting our operations, are discussed in our2018 • purchasing boycotts and public harm to our brand website. annual report, our Form 20-F. • risks related to issues with tariffs and taxation, including tax disputes Risk and opportunity management These include sustainability-related risks such as: • disruptions in our manufacturing, service creation, Sustainability aspects are also present in many • risks related to product safety, product misuse, delivery, logistics or supply chain caused, for of our key risks and opportunities which are environmental accidents, health and privacy and instance, by natural disasters, military actions, civil analyzed, managed and monitored as part of security, including cybersecurity threats unrest, public health and safety threats (including business performance management. Key risks • risk of non-compliance with regulations or our disease outbreaks), many of which may be fuelled by and opportunities are primarily identified against supplier and customer requirements the adverse effects resulting from climate change.

Nokia People & Planet Report 2018 Nokia today Our approach Connectivity Environment Integrity People Together Key data Assurance 34 2.5 Managing sustainability

The principles documented in the Nokia Enterprise Illustrative examples of responsibility Risk Management Policy, which is approved by the Audit Committee of the Board of Directors, require related opportunities and risks risk management and its elements to be integrated Improving lives with into key processes. One of the core principles is that technology, and network the business or function head is also the risk owner, energy eﬃ ency although all employees are responsible for identifying, There are revenue and, to some analyzing and managing risks as appropriate, given Improving lives extent, also brand opportunities in with technology creating technologies that improve their roles and duties. Our overall risk management people’s lives and in developing concept is based on managing the key risks that would more energy effi cient networks. prevent us from meeting our objectives, rather than Attracting and retaining talent solely focusing on eliminating risks. The ability to attract, motivate Attracting and and keep talent has an impact on retaining talent how well we are able to manage Network energy Key risks and opportunities are reviewed by the Group our revenue and cost-related effi ciency Leadership Team and the Board of Directors in order opportunities and risks. to create visibility on business risks as well as to enable Privacy and business ethics the prioritization of risk management activities. The Privacy and ethics are brand, Privacy and reputation and regulatory driven Board of Directors’ role in overseeing risk includes risk misuse of our risk areas but there are as well analysis and assessment related to financial, strategy technology opportunities in these areas. and business reviews, updates, and decision-making Ethics also covers how we work with suppliers and partners and proposals. More information about the process please Focus on opportunity management on opportunity Focus risks related to the misuse of our see page 93 of Nokia Annual Report 2018. Transparency technology. Business ethics Resource Transparency We systematically analyze sustainability-related effi ciency in our Increased transparency is required opportunities. Our innovations hold the potential own operations by governments, investors and various other stakeholders and it to change the way we live, from technologies that also has an impact on brand related improve people’s lives to those that help reduce risks and opportunities. our environmental impact. In 2018, we further Resource eﬃ ciency reviewed and aligned the risks and opportunities in our own operations in our Enterprise Risk Management (ERM) system Eco-effi ciency in our own operations and logistics includes with our most material sustainability topics. We also cost savings opportunities and reviewed the Task Force on Climate-related Financial these also have an impact on Disclosure (TCFD) guidance related to climate-related Low Focus on risk management High Nokia’s brand perception. risk disclosure and applied the recommendations in our publicly available CDP answers.

Nokia People & Planet Report 2018 Nokia today Our approach Connectivity Environment Integrity People Together Key data Assurance 35 2.6 Our recognitions and awards

Our recognitions and awards DISCLOSURE INSIGHT ACTION Sustainalytics’ February 2018 In September 2018 we received Based on our 2018 response, we ESG Rating of Nokia placed us a rating of AA on a scale of AAA- We were listed in the DJSI Europe were ranked at leadership level by among the top-rated technology CCC) in the MSCI ESG Ratings index. Our success in one of the CDP for our work on and disclosure hardware companies assessed by assessment1. leading sustainability ratings has of climate change data. We were Sustainalytics. been a great recognition for our also included in the leaderboard 1 The use by Nokia of any MSCI ESG work. However, the workload related of the supplier engagement rating Research LLC data, and the use of MSCI to answering is very high and for logos, trademarks, service marks or related to climate change. This index names herein, do not constitute this reason we decided not to was the first year that the CDP a sponsorship, endorsement or answer the DJSI questionnaire in questionnaire was aligned with the promotion of Nokia by MSCI or any of 2018 and 2019. recommendations put forth by its affiliates. MSCI services and data are the property of MSCI or its information the Task Force on Climate-related providers. MSCI and MSCI ESG Research Financial Disclosure (TCFD). names and logos are trademarks or We received the Telecommunications service marks of MSCI or its affiliates. World's 100 Most Industry Association, TIA (previously Sustainable Corporations QuEST Forum) 2018 Global Sustainability Award in the Network In 2018 and 2019 we are again Equipment Category, for the second among the World's 100 Most year in a row. Sustainable Corporations as per Corporate Knights rating. This is the fifth year in a row that we In 2018, we were in the top We were honored by the Ethisphere have been included. The Global 1 percent of suppliers assessed Institute both in 2018 and in 2019 100 ranking is widely associated by EcoVadis, achieving excellent as one of the World’s Most Ethical with sustainability leadership and scores in environment, sustainable Companies, owing to our strong transparency. procurement, and labor practices. compliance program, culture, and EcoVadis is one of the platforms We were again included in the bold vision for the future2. through which we provide annual Euronext Vigeo Eiris indices, in the For more information on all our sustainability information for Europe 120, the Eurozone 120 and 2 World’s Most Ethical Companies” and sustainability awards and recognitions visit evaluation, which is then shared the Global 120 (both in June and “Ethisphere” names and marks are registered trademarks of Ethisphere LLC. www.nokia.com/about-us/sustainability/ with customers as requested. December reviews). our-approach.

Nokia People & Planet Report 2018 Nokia today Our approach Connectivity Environment Integrity People Together Key data Assurance 36 2.7 Our economic impact

Our economic Connectivity and access to the We are a global company and have significant direct comes as a result of the benefits of technology. Internet has created enormous and indirect economic impact on our stakeholders. Connectivity and access to the internet has created impact Direct economic impact includes our purchasing of enormous economic and social advantages for billions economic and social advantages for goods from suppliers, dividends paid to shareholders, of people globally, enabling people to live better lives. wages and benefits paid to our employees, as well As we move into the Fourth Industrial Revolution, billions of people globally, enabling as financial expenses paid to creditors, income taxes new technologies such as 5G, IoT, AI and Virtual/ people to live better lives. paid to the public sector, and community investments. Augmented Reality (VR/AR) will touch every aspect of The related key performance indicators are listed in our lives and planet, and drive significant change for the table. We contribute indirectly to the economy in the better. Read more in Improving Lives on pages a variety of ways, though our greatest indirect impact 42–53.

Economic impact (Nokia Group)

2015 2016 2017 2018

Stakeholder Impact (EUR million) Nokia Group Nokia Group Nokia Group Nokia Group Direct Customers Net sales1 13 574 23 614 23 147 22 563 economic value generated

Economic value Suppliers Total purchases of goods 6 810 13 544 12 752 14 118 distributed and services

Shareholders Dividends paid 512 1 501 963 1 081

Employees Wages and benefits2 3 075 7 814 7 845 7 834

Creditors Financial expenses paid (+), 195 273 531 233 Financial expenses refunded (-)

Public sector Income taxes paid (+)/ 290 503 555 364 Income taxes refunded (-)

Communities Community investments3 - 5 7 7

Group numbers include both continuing and discontinued operations. Discontinued operations refer to the sale of the Devices and Services business in 2014 and the sale of the HERE business in 2015. 1 Net sales for Continuing operations in 2015 was 12 499 EUR million. 2 Includes termination benefits and excludes social security expenses. 2016 and 2017 values are updated to reflect values as available in Nokia Annual Report on Form 20-F 2018. 3 Reporting with current methodology started in 2016. 2016 values include corporate and key regional contributions. 2017 and 2018 also include some local contributions.

Nokia People & Planet Report 2018 Nokia today Our approach Connectivity Environment Integrity People Together Key data Assurance 37 2.7 Our economic impact

Our tax payments issued by the Organisation for Economic We are subject to income taxes in multiple In recent years, one of the key subjects in global Cooperation and Development (OECD). The jurisdictions. Our businesses and investments corporate responsibility discussions has been the guidelines outline the arm’s length principle as globally, particularly in emerging markets, are transparency and sustainability of a company’s tax an internationally accepted valuation standard subject to uncertainties, including unfavorable planning, and the allocation of tax payments between for intercompany dealings. Based on the policy or unpredictable changes in tax laws, taxation the countries in which they operate. In 2018, Nokia and guidance given by the OECD, we comply with treatment, and regulatory proceedings, including paid a total of EUR 364 million in direct income taxes the arm’s length principle in all our intercompany tax audits. In 2018 we achieved our tax related (EUR 555 million in 2017), of which EUR 107 million was dealings. We also follow the development of target to remain compliant with reporting paid in Asia-Pacific and EUR 340 million in Europe, the local transfer pricing rules and regulations in all requirements to disclose country specific Middle East, and Africa. The Americas region was in net territories and adopt localized transfer pricing information to tax authorities according to the tax receivable position of EUR 84 million. Following the policies if necessary. country by country reporting requirements. We acquisition of Alcatel Lucent, our 2018 figures include will also actively monitor and comply with other both former Nokia and former Alcatel Lucent entities. Large multinationals are obliged to disclose regulations in this area. country-specific information to the tax authorities In addition to paying direct income tax, we contribute (so-called country-by-country reporting within Indirect economic impact to society in the form of pension contributions, the framework of OECD BEPS action 13). We are Our company and its activities also indirectly impact social security contributions, payroll taxes, value compliant with the new reporting requirements. economic development in other ways. We generate added taxes, sales taxes, customs duties, excise business opportunities and employment within our taxes, environmental taxes, and other similar duties We may also seek advance pricing agreements, for supply chain and enable competence development and fees. Nokia is a major taxpayer and collector example, agreements between taxpayers and tax for our employees. The technology solutions and of indirect taxes and payroll-related taxes and we authorities, to the extent feasible in order to gain services we create and deliver drive positive change pay and collect these taxes in accordance with the mutual understanding and acceptance on the tax on a much broader scale. applicable rules and regulations. treatment of intercompany arrangements. The benefit of such agreements is to remove uncertainty Connectivity is beneficial in many ways and to many Our tax policy regarding tax treatment, especially in complex people and organizations. It has been shown to The foundation of our tax policy is to pay the right business arrangements. increase productivity and economic growth. amount of tax that is legally due in the correct jurisdiction. Furthermore, we observe all applicable Nokia conducts business in many countries, and in Connectivity helps to bring market and other relevant rules and regulations in every country where we every one of these countries our policy is to operate information to underserved communities, as well operate, and we follow the rules set by the relevant in an open and cooperative relationship with the as financial and commercial services to remote authorities. tax authorities. Our tax planning is aligned with areas. It enables new ways of doing business such as our business models, and taxes are considered in e-commerce, transforms public service delivery, and We also follow a global transfer pricing policy that business decision-making – but only as one of many brings innovation to a wider audience. Our industry is based on the Transfer Pricing Guidelines for elements. Our business and location planning is also has a major role to play in technology transfer Multinational Enterprises and Tax Administrations driven by sound commercial needs. and human capital development globally.

Nokia People & Planet Report 2018 Nokia today Our approach Connectivity Environment Integrity People Together Key data Assurance 38 2.7 Our economic impact

We will see even greater economic and social “The connectivity gap also continues to This activity benefits as countries gain improved productivity and close: over the next seven years, 1.4 billion supports SDG efficiency enabled by greater use of mobile and IoT people will start using the mobile internet services. Technology will continue to also make major Target 8.2: contributions to the funding of the public sector. The for the first time, bringing the total number “Achieve higher levels of of mobile internet subscribers globally economic productivity through advent of 5G and the potential of AR, VR, AI and IoT diversification, technological to connect people and things with each other in new to 5 billion by 2025 (over 60% of the upgrading and innovation, and faster ways could positively contribute to all 17 including through a focus on population). This growth in connectivity of the UN Sustainable Development Goals. high-value added and labor- is helping the mobile industry increase intensive sectors” In 2018 we had sales in approximately 130 countries, its impact across all the UN’s Sustainable delivering technology that improved network Development Goals and is spurring capacity and coverage in many emerging markets adoption of mobile-based tools and and announced new cooperation in countries such solutions (for example, in agriculture, as Sudan, Egypt, Ivory Coast, Cameroon, Senegal, Mali, Guinea-Bissau, Niger, Lebanon, the Philippines, education and healthcare) that aim to Nepal, and India. Examples of customer projects can improve livelihoods in low- to middle- be found at www.nokia.com/sustainability. income countries."

According to the GSMA’s ‘The Mobile Economy Source: GSMA ‘The Mobile Economy 2019” 2019’ report, mobile continues to make a significant contribution to socioeconomic development around the world. In 2018 mobile technologies and services generated $3.9 trillion of economic value (4.6 percent of GDP) globally, a contribution that will reach $4.8 trillion (4.8 percent of GDP) by 2023 as countries increasingly benefit from the improvements in productivity and efficiency brought about by increased take-up of mobile services. Further ahead, 5G technologies are expected to contribute $2.2 trillion to the global economy over the next 15 years.

Nokia People & Planet Report 2018 Nokia today Our approach Connectivity Environment Integrity People Together Key data Assurance 39 2.8 Innovation and sustainability

Innovation and Technology innovation plays a key societal challenges that humans will face within the companies are able to increase product/feature role in achieving a more sustainable next ten years. Innovation is fostered throughout throughput and achieve faster time to market sustainability our organization. For more information visit through co-creation on the platform. planet and better, healthier lives for www.nokia.com/innovation. The platform is designed to support multiple plug all people. The Nokia Garage is an employee-centric innovation and play applications enabling users to co-create playground. The Garage is a place to make an new value on the bottom and the top line. Users innovation a reality. An idea has little value until it are able to utilize tools of their choice (from Slack, is realized. Using tools such as 3D printers, Arduino GitHub to Office 365 and enterprise tools) to Nokia Bell Labs, the lead research arm of Nokia, is kits and software modeling programs, smartphone collaborate in front of corporate firewalls. Teams developing disruptive research for the next phase application simulators, and other tools, the Garage can call APIs, access sandboxes, and both virtual of human existence. It is renowned for its profound brings ideas closer to realization with fewer and physical test labs to prove their products in the influence on the evolution of telecommunications and obstacles. The Garage approach fosters the startup network environment and have a direct business information technologies and consequently how people spirit and enables intrapreneurship programs at incubation link to the decision makers. Products born connect, collaborate, compute and communicate. For Nokia. In 2018 we had Garages in Finland, France and through co-creation can easily be monetized to the more information see www.bell-labs.com. Belgium, with more planned in other countries. ecosystem via the marketplace.

The Nokia CTO organization and Nokia Bell Labs Open innovation We are the first co-founder of OpEN. Many other Consulting continuously engage with customers, and Open Ecosystem Network (OpEN) is a partner brands recognize the value proposition and are joining through this and ongoing market and technology agnostic and technology independent, multi-purpose the opening up movement, exposing their data and analysis, develop a long-term view of the most digital collaboration platform. This ecosystem-centric bringing their ecosystems with them. This creates difficult problems to solve that will have the greatest solution based on the principles of open innovation gravitas and a multiplying effect, providing the scale impact on our lives. and data democracy was originally designed to required to disrupt business as we know it today. enable ecosystem play across companies and In 2018, we held our Bell Labs prize competition industries. Nokia and partners are free to expose The OpEN platform has, for example, worked on for the fifth time, attracting the greatest creative information on OpEN, ranging from public data such co-creation of solutions to resolve sustainability- minds to solve some of the greatest challenges for as innovation and sourcing challenges to confidential related challenges. OpEN kicked off collaboration with humankind. The year’s winners were chosen from data such as product roadmaps and source codes, in the new United Nations Technology Innovation Labs among five submission entries comprised of six a secure manner. (UNTIL) with two challenges shared via OpEN. individuals, who were in turn drawn from a total of over 250 proposals from around the world. We The information, which is exposed in public and UNTIL are designed to move humanity forward faster created the Bell Labs Prize to help develop game- private (invitation only) digital rooms, attracts the by using innovative technology to solve some of changing ideas in science, technology, engineering ecosystem to the platform, and enables them to the world’s most pressing challenges. They utilize or mathematics with the potential to solve broader discover new value propositions. Collaborating satellite data to deliver brilliant innovative solutions

Nokia People & Planet Report 2018 Nokia today Our approach Connectivity Environment Integrity People Together Key data Assurance 40 2.8 Innovation and sustainability

for world peace, health, ecology, education and Innovation journey of liquid cooling sustainability in the spirit of the ESA and NASA mottos ‘for the benefit of all.’

Hack the Global Consumption aims to develop solutions and platforms which reduce the need for energy and/or reduce the levels of material Productization consumption, and new economic and circular business model platforms. Proof of concept Cases/examples: Research • 2019 MWC 5G Airscale and OpEN looks at solutions which utilize AI, machine Cases/examples: mMIMO learning for prediction, personalization and easy • 2018 Singapore Airscale Cases/examples: • 2018 World’s fi rst liquid cooled transaction, trend and value analysis, as well as baseband hotel demo 2G, 3G and 4G base stations in blockchain for adding trust, transparency and • Orange trial • 2018 Nokia Quality Award commercial operations in Elisa efficiency in value networks. For more information on • Paris COP – fl exi liquid cooled • 2017 Airscale 4G demo, MWC Finland network, Satakuntatalo OpEN visit www.open-ecosystem.org. demo • 2017 EEC Customer experience Helsinki • 2016–2017 waste heat reuse center study • 2017 Satakuntatalo project • 2017 Airframe demo, Las Vegas kickoff • 2013–2015 EU project OperaNet2 (energy effi ciency • 2016 Flexi demo, Orlando research)

Drivers • Cross functional cooperation • Passion and “sisu” to turn innovation • Sustainability mindset & vision into products • Internal entrepreneurship • Openness for collaboration

Read more on all of these topics at networks.nokia.com/5g

Nokia People & Planet Report 2018 Nokia today Our approach Connectivity Environment Integrity People Together Key data Assurance 41 3.0 Improving people’s lives with technology Improving people’s lives with technology

We believe we can achieve our greatest impact on the world’s sustainability challenges by developing and enhancing solutions and technology that improve lives and provide greater opportunities for people. The continued development and rollout of 5G and IoT has the potential to socially and economically empower any individual, community, industry or country.

Nokia People & Planet Report 2018 Nokia today Our approach Connectivity Environment Integrity People Together Key data Assurance 42 3.1 Highlights in 2018 Highlights in 2018 6.1 36 More than billion subscriptions commercial 5G contracts 1 000 on our customers’ networks as of end April 2019 mission critical network references More than 23 million 1.4 million indirect beneficiaries with people have directly benefited UNICEF mHealth program in Indonesia from our corporate community investments since 2016

Nokia People & Planet Report 2018 Nokia today Our approach Connectivity Environment Integrity People Together Key data Assurance 43 3.1 Connectivity Digital cities AI Digital home 5G Smart transport Connectivity Smart agriculture Ethics and compliance Industry 4.0 M2M transparency As we move into the era of the Automation Transparent Public safety & security Fourth Industrial Revolution, responsible sourcing connectivity will bring economic, educational, health and efficiency opportunities to all. Everyone and Economic everything opportunity connected IoT & productivity Access to healthcare

Resource management & Access to information G.fast efficiency and education Market access Innovation

Cloud Enable freedom of expression Better, VR cleaner Mitigate tech misuse risk environment Vulnerability of info Optical systems AR

Nokia People & Planet Report 2018 Nokia today Our approach Connectivity Environment Integrity People Together Key data Assurance 44 3.2 Our commitments, targets, and performance Our commitments, targets, and performance Priority area Material topic Targets Achievements 2018 Status

NEW target 2019: Establishment of a global rapid response team that can quickly respond in case of disasters.

Nokia People & Planet Report 2018 Nokia today Our approach Connectivity Environment Integrity People Together Key data Assurance 45 3.2 Our commitments, targets, and performance Our commitments, targets, and performance Priority area Material topic Targets Achievements 2018 Status

Not achieved

Nokia People & Planet Report 2018 Nokia today Our approach Connectivity Environment Integrity People Together Key data Assurance 46 3.3 Connecting people and things

Connecting We are building extraordinary communications. And today we see the digitalization Technology and sustainable development of these key technology areas: With the advent of such technologies as 5G, IoT, people and networks, software and and AI, individuals and communities will be more ecosystems. We are continually economically and socially empowered. Through Digital energy: combining smart power technology we are already seeing the initial efficiency things reimagining technology to meet grids and smart meters into platforms that promised by the fourth industrial revolution: smart dynamically match energy generation and cities that are more efficient, safer, cleaner and society’s many challenges and demand from both new and traditional more secure; increased access to digital health; and opportunities, making communities sources better management of natural resources through digitalized utilities, building towards a purpose- smarter and more sustainable, Digital transport: moving people and driven economic model. As we move into a new era transportation safer, and goods across oceans, skies, and land of technology, we also recognize and aim to mitigate autonomously potential risks, many already hotly debated in society enterprises more agile. as a whole. The social issues related to technology Digital health: remotely enabling connected include automation and the changing landscape of health care from anywhere jobs and talent acquisition, the role of AI and big We look at how our technology impacts people – data in privacy, the enhanced security of smart cities, enabling them to control and manage their wellness, Digital communication: connecting billions the misuse of technology, and the impact of smart experiences, choices, lives, and how they explore and of people and things, allowing them to devices on society. experience the world around them. We are focused interact in new ways on the human benefits of technologies that make a real difference in the lives of people and society. Digital production: driving a major shift from mass production to distributed, More people and more things will be connected localized production, enabling the creation to each other and the world around them. It is of goods in near real time happening now. Nokia Bell Labs have looked at the key technological elements that came together and caused previous unprecedented positive Furthermore, the digitalization of production and change in social, economic and industrial arenas. manufacturing will result in a shift from centralized These areas of technology change were related to mass production to distributed and localized energy, transportation, health and sanitation, and production facilities.

Nokia People & Planet Report 2018 Nokia today Our approach Connectivity Environment Integrity People Together Key data Assurance 47 3.3 Connecting people and things

Connecting the unconnected member states, and currently have approaching 100 require increased security capabilities to defend This activity In 2018 we had sales in approximately 130 countries, engagements globally for 5G. against malware and bots with solutions such as our supports SDG delivering technology that improved network NetGuard Security Suite. Read more in our latest Targets: capacity and coverage in many emerging markets In 2018 we announced, among others, agreements Threat Intelligence Report. and announced new cooperation in countries such as and collaboration on 5G with China Mobile, and 9.c: Significantly increase access to information and Sudan, Egypt, Ivory Coast, Cameroon, Senegal, Mali, rain in South Africa, inked a 3.5 billion dollar multi- For example, we are working with the world leader in communications technology and Guinea-Bissau, Niger, Lebanon, the Philippines, Nepal year 5G deal with T-Mobile in the US, collaborated package delivery services, with more than 500 hubs strive to provide universal and affordable access to the internet and India. We participate in the Telecom Infra Project with NTT DoCoMo in Japan on 5G applications, and in the USA and another 400 around the world. We are in least developed countries by (TIP) telecominfraproject.com and also created the launched Nokia Reefshark chipsets that will enable creating a next-generation, fully automated wireless 2020; and Nokia Community Hosted Network solution to help massive performance gains in 5G networks. Learn network that encompasses voice, data, mobile, connected rural and remote locations. Examples of more about how 5G will deliver the extraordinary at and IoT for tracking packages and vehicles in one 9.1: Develop quality, reliable, customer projects can be found at www.nokia.com/ networks.nokia.com/5g. seamless system. sustainable and resilient infrastructure, including regional sustainability. and transborder infrastructure, to Our fiber access solutions support bandwidth- Artificial Intelligence support economic development 5G – the great enabler hungry consumer and enterprise services to homes AI and Machine Learning are already playing a key and human wellbeing, with a focus on affordable and equitable 5G is one of the most important technologies to be and businesses. In January 2019, for example, we role in making communications networks more access for all. introduced in decades, as it will drive fundamental and announced the collaboration with Open Fiber to efficient and will optimize future networks and expansive changes to the communications network bridge the digital divide in Italy by building high- enable a broad range of new services over 5G and infrastructure. Delivering extreme broadband and speed fiber optic communication networks that will cloud. In June 2018 we announced a memorandum highly reliable low latency connectivity at massive bring ultra-broadband services to the small towns of understanding with China Mobile to investigate scale, it will provide new experiences for consumers and rural areas of Italy. the potential of AI and machine learning to enable and address the different needs of businesses, these services. The companies will jointly establish transforming every aspect of our lives. In 2018 we also worked, for example, with Telecom a laboratory in Hangzhou, China, to develop the Egypt to offer higher-speed services to both demo system to verify technology use cases using 5G is critical for use cases such as virtual and broadband and mobile customers marking the first Nokia 5G Future X architecture. We also contribute to augmented reality, e-education and e-health, 200G long distance, single carrier transmission the responsible development of AI technology with industrial applications, machine-to-machine service in Africa. participation in the EU High-Level Expert Group on AI (M2M) communications as well as mission-critical which issued their ethics guidelines for trustworthy communications. Smart cities will be fully enabled by IoT artificial intelligence. Read more atEthics guidelines 5G. 5G will drive gains in healthcare and education, Everything and everyone will be connected and for trustworthy AI. enable safer roads with connected cars, and even the Internet of Things will continue to play a key eliminate hazardous situations for workers as role. IoT will be an integral enabler of smart cities, risky tasks could be performed by robots. We are the smart home, utilities, agriculture, automotive, continuing our work with the European Commission public safety and healthcare. As 5G takes off we to advance the 2020 5G trial plan activity across will see a proliferation of IoT devices and this will

Nokia People & Planet Report 2018 Nokia today Our approach Connectivity Environment Integrity People Together Key data Assurance 48 3.3 Connecting people and things

Smart City Infrastructure Shared + Secure + Scalable

City IoT platform City shared network City-wide access City applications Devices and sensors

Smart Safe Sustainable • Smart public services • Smart surveilance • Smart energy • Smart infrastructure • Smart monitoring • Smart mobility & buildings • Smart emergency & transportation • Smart health care services • Smart business & education models

Digital lives operations, reduce traffic congestion and ease stress advanced technology infrastructure. Learn more As the world becomes more densely populated, as on city infrastructure, and attract visitors, businesses about The Surprising City of the Future. more and more people live in large cities, there are and talented workers. serious questions being raised about the livability of The city of Bristol, UK, has numerous awards. Driving those cities. IoT for Smart Cities is a fully integrated, modular and this success is the unique digital infrastructure in scalable framework to efficiently deliver and manage place, offering state-of-the-art fiber broadband Congestion, pollution, infrastructure, access smart city services like video surveillance, lighting, networking capability to its citizens. A new home of to services, and many more issues are creating parking, waste management, and environmental entrepreneurial tech industries is growing. In fact, challenges on an unprecedented scale. sensing. their commitment to ensuring connectivity in the city is so great that they’re investing millions of pounds Smart cities For example, Chattanooga, USA, is one of the only to explore the possibilities of technology. Learn more Cities can be smarter, safer and more sustainable by places on Earth with internet speeds as fast as at www.bristolisopen.com. using smart technologies to connect, engage and one gigabit per second, and its unparalleled smart empower citizens, to develop innovative city services, grid system has led to a string of entrepreneurs In 2018, we worked with Singapore-based telecom manage public safety more proactively, streamline and start-ups taking advantage of Chattanooga’s operator StarHub to look into new mobility analytics

Nokia People & Planet Report 2018 Nokia today Our approach Connectivity Environment Integrity People Together Key data Assurance 49 3.3 Connecting people and things

use cases to help operators create value from the data in their networks to address the needs of digital cities. We also introduced services to solve challenges of urbanization. IoT for Smart Cities and Sensing as a Service show the benefits of IoT in building economically and environmentally sustainable cities.

In October 2018, we successfully demonstrated our Integrated Operations Center (IOC), a smart city management solution, to Viettel in Hanoi, Vietnam. Once deployed, the IOC will allow Viettel's customers to efficiently manage several smart and safe city use cases such as traffic monitoring, pollution detection and water quality monitoring.

In early 2019, MIRIS, a leading Norwegian real estate and technology firm, selected our AirFrame Open Edge data center technology to support delivery of smart city services in business parks and residential areas. MIRIS plans to build data centers in about 20 urban locations in Norway during 2019, followed by a wider roll out across the Nordic region. Read more in our press release.

Learn more about our work with Smart Cities towards broadband while assuring mission critical and IoT sensor data, allowing for real-time incident networks.nokia.com/industries/smart-city. reliability and performance. We have more than alerts. Security teams are immediately notified when 1 000 references for mission critical networks and the solution flags emergencies and potential criminal Public safety 346 references for commercial LTE networks. For activity such as vandalism, theft, or drug and human We help public safety agencies use broadband example, in Qatar, we are implementing a nationwide trafficking. networks and digital technologies to improve the LTE network for public safety providing agencies like effectiveness of first responders, address threats fire brigades and medical emergency services clear predictively and make faster, more informed decisions. benefits of high-speed data in their daily work.

For example, we offer a comprehensive public Nokia Scene Analytics solution processes thousands For more information on our approach to public safety visit safety services portfolio to simplify the evolution of simultaneous streams from CCTV cameras, audio networks.nokia.com/industries/public-safety.

Nokia People & Planet Report 2018 Nokia today Our approach Connectivity Environment Integrity People Together Key data Assurance 50 3.3 Connecting people and things

Our Future X architecture harnesses technologies capabilities such as machine learning, artificial we made a commitment and investment in a such as Industrial Internet of Things, edge intelligence and widespread automation to efficiently smart water management end-to-end solution computing, cloud, artificial intelligence, machine transform operations. portfolio, where one of the main business results learning, augmented and virtual reality, and high- is reduction of water leakages from double to performance networking – including 5G – to drive Utilities single digit percentages. We have also worked with dramatic productivity improvements across a wide Power utilities can build an efficient smart grid that the Thames Water authority in the UK on waste range of industrial sectors. enables new opportunities for sustainable energy water management, improving resource utilization, offerings. Our solutions help manage grids more minimizing failure on the network, and reducing For urban safety, we introduced S-MVNO for Public efficiently to deliver better power quality, improved flooding, and pollution. Safety service, which enhances commercial LTE resource efficiency and reduce carbon emissions. Our networks to meet mission critical requirements of solutions provide power utilities with a network that public safety agencies. can reconfigure itself, using real-time monitoring to detect and address issues as they arise. Digital industry – Allwhere Our Future X architecture is the foundation upon In 2018, we were selected by French power utility which industry will build its next great age. The EDF's R&D unit to test the performance of LPWA Industrial Internet of Things will benefit all key wireless networking technologies - key emerging industries – energy, utilities, manufacturing, standards for Internet of Things (IoT) device automotive, health, and transportation among connectivity - to support critical operations for others. industries. The two companies will engage in a comprehensive testing regime, among the first of For example, in 2018 we worked with Finnish its kind in the industry, exploring the capabilities of operator Telia and Intel to conduct an industrial LPWA technologies to support real-world industrial trial leveraging the ultra-low latency, high- applications. bandwidth capabilities of 5G to support time-critical applications and enhance production and efficiency We also began work with Brazilian power distributor in a manufacturing environment. We announced Elektro to deploy a private LTE network to increase our cooperation with Tencent in China, one of the the reliability and efficiency of the electrical grid in world's biggest online service providers to develop the City of Atibaia and surrounding areas in the state new 5G applications while exploring 5G's potential of Sao Paulo. This highly reliable wireless 4G network, in transportation, finance, energy, intelligent the first of its kind in Brazil, will serve more than manufacturing and entertainment. 75 000 homes and businesses.

5G allows operators and businesses to connect Water utility companies also benefit from our For more information on how we are helping cities and assets and take advantage of new flexibilities and technology. For example, in 2018 in Noida, India, communities go digital, visit www.nokia.com/sustainability.

Nokia People & Planet Report 2018 Nokia today Our approach Connectivity Environment Integrity People Together Key data Assurance 51 3.4 Technology that makes a difference

Technology Our advanced technical solutions that makes help to reduce the impact of natural disasters and enable the a difference transformation and modernization of community health services.

Saving Lives Nokia Saving Lives (NSL) is an innovative non- profit initiative which aims to bring the advanced technical solutions to the crisis field for humanitarian purposes. Based on a portable LTE network, LTE connected drones, and a portable data center for analysis functionality, NSL is operated under the collaboration of humanitarian actors and Network Communications Service Providers.

NSL also supplies technical experts to operate the solution during disasters, following the rules and regulations of humanitarian actors. This helps to ©UNICEF/Rabenstein/2018. Children enrolled in Class One of Islamia Primary School in Nairobi are using the Digital prevent a delay in the use of the solution in the Literacy Project tablets procured by the Kenyan Government. emergency area due to a lack of understanding of operational processes and technology. During a disaster, network infrastructure can be severely effectively. Read more atnetworks.nokia.com/ with the Philippine Red Cross (PRC) and Smart damaged at a time when commercial network traffic innovation/nokia-saving-lives. We progressed our Communications, who provided the spectrum dramatically increases as people try to reach their Saving Lives Innovation initiative where we combine to operate the solution. The NSL program in the loved ones. The NSL’s portable LTE network can the capabilities of the ultra-compact LTE network Philippines is partially supported by GSMA. be moved to wherever a network doesn’t exist, to with drones and drone video applications for search enable fast decisions and saves lives. and rescue missions. The disaster management process was implemented to address two types of incidents (for example, Furthermore, Network Communications Service NSL was deployed for crisis management and rescue landslides and pregnant women involved in car Providers own the spectrum to implement NSL in the Philippines on 23 Nov 2018 in collaboration accidents) during search and rescue operations. After

Nokia People & Planet Report 2018 Nokia today Our approach Connectivity Environment Integrity People Together Key data Assurance 52 3.4 Technology that makes a difference

LTE-connected drones mapped the disaster scenario, modernize community health services by introducing the information was safely and securely stored in innovative mHealth applications, to improve health at the portable data center. The scenario was then the community level. Directly reached beneficiaries analyzed using this data and the information was are those with whom we had direct contact in 2018, promptly forwarded to PRC for rescue and disaster for example, 4 400 newborn-caregiver pairs who management. Aside from mapping the impacted received immunization reminders to vaccinate their areas , the swarm of drones connected via this newborn children (pairs who had been registered instant private LTE network also streamed live video in 2017 and continued to receive reminders due to PRC, enabling the organization to save crucial to continuous vaccination needs in 2018 and new minutes that spell the difference between life and pairs with newborns that were newly identified with death for those affected. vaccination needs, registered and received reminders in 2018), and also 51 000 vulnerable children who, We will continue partnering with operators and NGOs with the support of RapidPro, were identified and on this initiative to help rescue operations in different connected to health facilities through UNICEF's countries, offering a limited number of our Nokia program. Indirect beneficiaries are those vaccinated Saving Lives technical solutions on a non-profit basis. by the health facility staff (23 201 669 beneficaries for year 2018) and those who received malaria Corporate community investments bednets (3 133 556) as part of national Ministry Our corporate community investment emphasizes the of Health campaigns which were monitored and role of technology in improving lives by connecting supported through the mHealth platform. the unconnected, empowering women and girls, and saving lives. In 2018, we rolled out five corporate We also have regional and country-based NGO programs at the global level. These programs included cooperation. Our strong presence in India is shown connecting schools in Kenya and the mHealth also in our ongoing local community investment program in Indonesia both with Unicef. We also programs which link closely to our three global finalized our long-running program of support for corporate community investment themes. Our education in Myanmar with Save the Children. Our Kanchiloom project in India continued to enable greenlight for girls program also continued in 2018. weavers to learn IT and business skills in order to We also ran our Season’s Greetings voting campaign to enhance their income by improving their market amongst employees benefitting three chosen access. We also announced Smartpur project charities. that aims to develop 500 digitally integrated and sustainable villages across India in line with the Making a real difference in 2018 government's vision of Digital India. More details on With Nokia's support, Unicef Indonesia supports our key programs can be found in the Making change the Government of Indonesia to transform and happen together section of this report.

Nokia People & Planet Report 2018 Nokia today Our approach Connectivity Environment Integrity People Together Key data Assurance 53 4.0 Protecting the environment Protecting the environment

The Intergovernmental Panel on Climate Change (IPCC) released their special report on the impacts of global warming at 1.5 ºC, underscoring the need for even greater action by all parts of society, business and government to increase activities to strengthen the global response to the threat of climate change, sustainable development, and efforts to eradicate poverty.

The IPCC report argues that limiting climate-related risks to sustainable development can be enabled by an increase in investments and policies towards adaptation and mitigation, and an acceleration of technological innovation and behavior changes.

Nokia People & Planet Report 2018 Nokia today Our approach Connectivity Environment Integrity People Together Key data Assurance 54 4.1 Highlights in 2018 Highlights in 2018 We delivered zero emission products to over Average energy savings 140 SBT for customers whose networks we modernized customers globally Science-based targets on track

Launch of the world’s first liquid cooled base station reducing CO2 emissions up to 43 99.5% Material/energy utilization 80% from equipment end-of-life services % Nokia People & Planet Report 2018 Nokia today Our approach Connectivity Environment Integrity People Together Key data Assurance 55 4.1 Environmental efficiency

Minimization of our Supplier requirements energy use, emissions, Minimizing Audits & assessments waste, and water our footprint Environ- Training & awareness Ensure our own Package optimization operations are eco-efficient mental Reduced air transportation Support a more efficiency Supplier requirements eco-efficient supply chain

A circular lifecycle approach to Raw materials, components, Our operations, logistics, our operations and portfolio products & services and installations minimizes energy and resource Maximizing use, and maximizes our positive our handprint impact on the planet. Help customers deal with increased data traffic in a sustainable way End of product life Product use Help other industries to reduce their energy use Lifetime extension and emissions & refurbishment of our Creation of products customers’ old telecom that are energy and Refurbish and recycle material efficient equipment. old telecom equipment Material recycling

Nokia People & Planet Report 2018 Nokia today Our approach Connectivity Environment Integrity People Together Key data Assurance 56 4.2 Our commitments, targets, and performance Our commitments, targets, and performance Priority area Material topic Targets Achievements 2018 Status

Achieved

NEW target 2019: At least 30% utilization of renewable electricity, compared to total purchased electricity.

2018 Electricity consumption across our facilities Achieve a facility electricity usage reduction of 3%, compared to decreased by 3% as compared to 2017. Assured 2017 level. Achieved

NEW target 2019: Facility energy usage reduction of 3%, compared to 2018 level.

Nokia People & Planet Report 2018 Nokia today Our approach Connectivity Environment Integrity People Together Key data Assurance 57 4.2 Our commitments, targets, and performance Our commitments, targets, and performance Priority area Material topic Targets Achievements 2018 Status

NEW target 2019: GHG emission reduction of 3% from facilities, compared to 2018 level (Scopes 1+2) .

NEW target 2019: 90 dedicated one-to-one reviews with suppliers, collaborative emission reduction projects.

Nokia People & Planet Report 2018 Nokia today Our approach Connectivity Environment Integrity People Together Key data Assurance 58 4.2 Our commitments, targets, and performance Our commitments, targets, and performance Priority area Material topic Targets Achievements 2018 Status

Protecting the Waste and water in own 2018 Water use decreased by 22% compared to 2017. environment operations Reduce the water use in our facilities by 2% compared to 2017. Assured

Achieved

NEW target 2019: Reduce the water use in our facilities by 1% compared to 2018.

NEW target 2019: Recycle at least 60% of facility waste.

NEW target 2020: Recycle at least 75% of facility waste.

Nokia People & Planet Report 2018 Nokia today Our approach Connectivity Environment Integrity People Together Key data Assurance 59 4.3 Circular economy

Circular We continue to emphasize our environmental impact, related environmental risks “Deep collaboration and partnership and opportunities, and current and potential changes commitments to protecting the between industries and sectors is what is in our business that contribute to how we determine needed to accelerate the transformation economy our focus areas. environment and supporting the to a decarbonized future. By bringing fight against climate change. We minimize the impact of our operations and our together companies from around the globe products in use through a robust environmental and harnessing the potential of the Fourth management system, putting in place the process, Industrial Revolution, the Step Up Coalition We concentrate on ensuring environmental procedure, and policy on a global level, which helps sustainability across our own operations and on us to monitor our progress and identify needed is in a unique position to catalyze the working hard to reduce power consumption and improvements. Our own operational footprint is change the planet needs.” energy use across our product portfolio and the certified under the ISO 14001:2015 environmental networks we deliver to our customers. We also look at management system (EMS) standard, and the current For more information on the Step Up Coalition visit the many ways in which the technology we produce coverage of employees within the scope of that stepupdeclaration.org/. can help other industries lower their carbon footprint certification is around 83 percent. Our EMS covers and improve resource efficiency. all our Networks businesses. In 2018, our offices in Espoo, Tampere, and Oulu were certified under the We believe the potential benefits of digital technology WWF Green Office program. We have two key objectives: innovations can play a significant role in not only • design products and services that reduce reducing the negative impacts but also increasing the Circular approach environmental impact in our customers’ networks, and positive impacts of technology on industries, society Circular thinking is integrated into our whole value • reduce our environmental impact by operating and individuals. To make the greatest impact it is chain, including finding every opportunity to avoid more efficiently, that is within our facilities where essential that all parties come together and play their waste generation. Circularity for us is about working we perform our jobs, and in the facilities where our part in nurturing the environment and accelerate the efficiently to avoid waste generation and resource products are manufactured and distributed. uptake of new digital technologies such as 5G, IoT, overuse through better design, serviceability, and We combine circular and climate thinking smart automation and cloud computing to halt the product lifetime extension. across three domains: advance of climate change. • how digitalization helps achieve greater eco- In order to achieve significant reduction in our efficiency in society As part of our global Environmental Management environmental footprint, we realize we need to • how our products are designed and managed System (EMS), we analyze our most significant go beyond small incremental improvements in • how our operations are managed environmental aspects annually. This analysis will our operations and in equipment design, ensure determine our focus areas for the upcoming year and intelligently distributed investment in R&D and beyond. We take into account current and potential network deployment, and to provide end-to-end future regulatory and other related requirements, solutions that deliver exponential growth and stakeholder interest, the magnitude of the performance. We drive to develop networks and

Nokia People & Planet Report 2018 Nokia today Our approach Connectivity Environment Integrity People Together Key data Assurance 60 4.3 Circular economy

products that use no more energy in the future than Signifi cant environmental aspects 2019 they are using today, as the energy consumption of our products in use is by far our most significant negative environmental impact. Energy & emissions Natural resources & waste Climate commitment In 2018, we continued to work towards our Science • Restricted materials and substances in products Based Targets. The targets were formally approved in June 2017. More information about the Science Based • Use of confl ict minerals in products • Energy consumption of our suppliers Targets Initiative at sciencebasedtargets.org and • Manufacturing waste at suppliers current status of both long-term targets can be found Raw materials, components, Raw materials, components, • Manufacturing water consumption at suppliers on pages 57–58. products & services products & services

In 2018, we also declared our support for and participation in the Step Up declaration along with 20 • Waste generated from production in Nokia factories other leading companies as part of the Mission 2020 • Packaging design and materials initiative. • Energy consumption of laboratories • Facilities operational waste • Energy consumption of data centers • Single-use plastics We have also aligned our climate related disclosures, • Energy consumption of offi ces • Waste from facility refurbishment projects including risks, in our CDP report according to the Our operations, logistics, • Low emission sources of energy Our operations, logistics, guidance of the Task Force on Climate-related and installations and installations • Management of contaminated land Financial Disclosures (TCFD). In 2018 we continued • Waste at customer project sites analyzing various climate related scenarios and their impact on Nokia business. Some of the conclusions of this scenario analysis are included in our CDP disclosure covering year 2018. • Energy consumption of Nokia products • Energy effi ciency at customer sites; • Takeback, refurbishment, recycling of Nokia products network optimization

Product use End of product life

Nokia People & Planet Report 2018 Nokia today Our approach Connectivity Environment Integrity People Together Key data Assurance 61 4.3 Circular economy

Transparency is an accepted requirement in today’s Our carbon footprint (Scope 1+2+3), metric tons CO2e commercial and digital world, but evidence is becoming the watchword of true transparency. The Emission source Metric tons CO e (% of total) TCFD recommendations and the SDGs will change 2 sustainability and its reporting, requiring companies Use of sold products 38 410 000 85.0% to disclose validated data, quantify impact and prove Purchased goods and services 5 284 000 11.7% future resilience. Energy use in facilities and by fl eet 499 400 1.1% Our Scope 1 & 2 emissions 85% Capital goods 398 200 0.9% Use of sold Climate change – risk and opportunity Upstream transportation 384 300 0.9% products Climate change and the depletion of natural resources and distribution perhaps provide the most pressing social and business Employee commuting 118 400 0.3% risk of our time. The potential effects of climate Business air travel 81 500 0.2%

change are wide ranging, from the natural disasters Percentages counted out of reported, relevant GHG emissions. that could affect our supply chain and the world economy, to rising energy prices, greater regulation, and materials scarcity affecting production. But we also see the opportunity for the technology we develop to help others drive down their negative impact on the environment with energy efficient products, best use throughout its life cycle. We have been partnering base stations. You can read more about our first of materials, greater automation, and the digitalization with VTT Technical Research Centre of Finland in the commercial liquid cooling case and an overview of the of industries and society. development of a new approach for quantifying carbon project from its very beginnings on page 41. handprint based on standardized methods. The result The day-to-day challenge of reducing our is a process of assessing and communicating the environmental footprint – using resources more carbon handprint of a product or service in line with life efficiently and minimizing emissions and waste – is cycle assessment and carbon footprint methods. Read already business as usual. We have gone far beyond more at: www.vtt.fi/handprint. this and are developing products, services and technologies that also reduce the environmental In one case study for Nokia – a system of mobile impacts of our customers. network radio base stations with 200 air cooled sites replaced with liquid cooling and energy harvesting In contrast to the phrase carbon footprint, which – VTT estimated the carbon handprint (positive refers to the negative environmental impact caused environmental impact) to be about 100 000 kg CO2e by greenhouse gas emissions throughout the life per annum. Over an average base station operating cycle of a product, the term carbon handprint refers lifetime of five years, the handprint is slightly greater to the positive environmental impact of a product than our manufacturing carbon footprint of the radio

Nokia People & Planet Report 2018 Nokia today Our approach Connectivity Environment Integrity People Together Key data Assurance 62 4.4 Sustainable product design and materials

Sustainable We are committed to protecting product design the environment and to mitigating climate change by making the and materials products we deliver to our customers more efficient in terms of how they are made and how they operate.

We do this by designing for the environment, or DfE. Our DfE mission is clear and simple: to innovate technologies that ensure that we develop environmentally sustainable products.

Life cycle thinking is a key principle of our approach to reducing our environmental impact and improving As depicted in the diagram on the following page, sold for reuse. As a secondary option, materials material and energy efficiency across our own our DfE Program is key to the development of in the product can be recycled. After a product operations, product use-time and take-back, and environmentally sustainable products and is integrally is developed, manufactured and put into use by through to our suppliers. It is integral to the products linked to circular economy. There are services our customers, and reaches its end of life, the and services we deliver to customers from creation available for end-of-life takeback and treatment. user can contact our Asset Recovery services at to end of life. We employ the ISO 14040 /14044 Our customers can contract us for environmentally [email protected]. standards as the bases for the life cycle assessments responsible management of obsolete equipment. (LCAs) performed on our products. DfE methodologies Our Asset Recovery services offer customers for product development When we measure our carbon footprint from our different ways to maximize the value of the obsolete We have set a Science Based Target for 2030 operations through to the complete life cycle of equipment and to minimize the harmful impact (baseline 2014) to reduce by 75% our Scope 3 our products – that is, their design, manufacture, of its disposal. The main scope of this end-to-end greenhouse gas emissions caused by the emissions distribution, use, and treatment at end of life – we service is to reuse assets that are no longer usable from customer use of our sold products. The DfE find that our products’ energy consumption during by the customer owning the equipment. Depending program helps product developers to achieve this use is a priority, as about 85% of our total carbon on the state and age of the equipment, and on goal by setting targets and evaluating energy-saving footprint comes from this part of our business. specific customer needs, it can be refurbished and features with each new product introduction.

Nokia People & Planet Report 2018 Nokia today Our approach Connectivity Environment Integrity People Together Key data Assurance 63 4.4 Sustainable product design and materials

Product design for circular economy

Design for Material & Energy Environment (DfE) Product Effi cient Designs Development

Drivers

Nokia Goals Lifetime Extension & Vision

Material & Energy Customer Effi cient Products Requests Customers Environmental Final Assembly & Emerging strategy and Packaging Regulations requirements Products at End of Life Investor Reuse, & NGO Input Refurbishment & Recycling

Asset Recovery

Environmental Material & Energy Requirements Effi cient Parts

Suppliers

Nokia Design for Environment (DfE) process is key to material and energy effi cient product development and the circular economy.

Nokia People & Planet Report 2018 Nokia today Our approach Connectivity Environment Integrity People Together Key data Assurance 64 4.4 Sustainable product design and materials

Some examples of recent energy efficiency environment. These substances must not be present in small amounts as refrigerants in hermetically improvements within our products include: in our products, components, and materials that sealed units to cool critical electronic components • new component technologies for routers are selected during the product design phase. In in mobile network base stations. Although the • improved software features such as low power and addition, future customer and legal requirements amount of fluorinated gases we use is very small standby modes for fixed broadband, and will have an influence on the choices made today in relative to the total EU market quota, we are • improved thermal management – optimized developing a product. working to eliminate the use of fluorinated gas cooling, such as fan efficiency, and liquid cooling. based refrigerant materials. To ensure these needs are met, our products, DfE for software development including original equipment manufacturers’ (OEMs) We are compliant with the new declaration of DfE is also intended for software development as product parts, modules and components must conformity requirements for India Restriction of it offers distinct means to control features and meet the requirements stated in our Substance List. Harzardous Substances (RoHS) and Taiwan RoHS, and operational performance and thereby provide energy Suppliers’ product documentation must also provide the new Hazardous Substance Table requirements efficiency improvement for the intended hardware us with a list of any EU REACH candidate substance of for China RoHS. We continued our work to eliminate platform. In 2018, we developed a new guidance very high concern present in a product. Furthermore, the use of the four phthalates that will be restricted document for DfE for software in addition to the products, parts, modules, and components must under the European Union RoHS Directive. By mid- Energy Scorecard. Environmental impacts associated not contain any substance listed as To be Avoided December 2018, we confirmed with our suppliers with network infrastructure equipment software are in our Substance List to the extent technically and that all parts that we receive from the end of March principally related to the energy consumed by the economically possible. 2019 will be free of these phthalates. This ensures, network equipment and the related greenhouse gas well in advance of the July 2019 deadline, that all our (GHG) emissions. Because the design of software Each year, the Nokia Substance List is updated to equipment continues to comply with the specified can significantly affect the amount of energy used cover our concern over substances that may pose requirements. The EU Commission’s draft decisions by the network equipment, software designers a potentially increasing risk to the environment on the RoHS directive’s exemptions missing from should understand how their code affects such and human health. For 2018, we further restricted 2017 were published in 2018. They included time equipment energy usage. Examples of the guidance beryllium compounds in a more unified approach extensions for lead and cadmium in optical parts, that is provided includes: computational efficiency, for supplier awareness and avoidance. We continue lead in alloys of steel, aluminum and copper, and such as from efficient algorithms, multithreading, to globally restrict the use of ozone depleting lead in high melting type solders. This provides vectorization, and accelerating an application substances in products, packaging, as well as in additional time for us to phase out these specialized domain; data efficiency; context awareness; and, supplier processes per the requirements of EU applications of lead within our supply chain and avoiding software runtime bloat. Regulation (EC)1005/2009 on Ozone Depleting component inventories. Substances which implements the Montreal Protocol Materials and Restricted Substances into EU legislation. We are committed to comply with all applicable Materials and restricted substances are another environmental laws and regulations such as EU RoHS key part of our DfE program. Global legislation In 2017, we registered with the European Union for Directive 2011/65/EU (as amended), all requirements or regulations ban or restrict several substances the placement of products into the market which of the EU WEEE Directive 2012/19/EU (as amended), considered hazardous to humans and/or the contain fluorinated gases. These materials are used all requirements of Regulation (EC) No 1907/2006

Nokia People & Planet Report 2018 Nokia today Our approach Connectivity Environment Integrity People Together Key data Assurance 65 4.4 Sustainable product design and materials

of the European Parliament and of the Council of Carbon handprint of an indoor installation of a base station, case Satakuntatalo 18 December 2006 concerning the Registration, Evaluation, Authorization and Restriction of 100% Chemicals (REACH). For more information on REACH please see the Reach Declaration.

Circular economy thinking is another area that will have a significant impact on the way products 80% Potential carbon handprint of waste heat reuse are designed and manufactured globally. We are Waste heat 3 610 kg CO2e/a already seeing a rise in potential new regulations and industry voluntary agreements. To download the latest Nokia Substance List, go to www.nokia.com/ 60% about-us/sustainability/downloads.

Material Efficiency Carbon handprint of liquid Our Design for Environment process for all product cooled vs. air cooled base station development within the company includes design 40% 1 197 kg CO2e/a principles, guidance, and best practices to promote

material efficiency of products. Material efficiency Carbon footprint of includes designing products that use less materials Air cooled base station and energy while having increased throughput 4 198 kg CO2e/a Carbon footprint of capacity and functionality. 20% Liquid cooled base station 3 001 kg CO2e/a In 2018, we finalized new in-house designed and developed chipsets with higher port density, integration features, and throughput per watt. For 0% mobile networks, the resulting ReefShark chipsets Air cooled base station Liquid cooled base station reduce the power consumption of the AirScale 5G baseband module by 64 percent. And in a world first, Calculation: VTT Technical Research Centre of Finland. Nokia, Elisa and Efore commercially deployed a liquid- cooled base station that can reduce CO2 emissions by up to 80 percent. The liquid-cooled base station in Helsinki directs previously wasted heat to use in heating an apartment building. The removal of air- cooling components can also cut energy costs by up

Nokia People & Planet Report 2018 Nokia today Our approach Connectivity Environment Integrity People Together Key data Assurance 66 4.4 Sustainable product design and materials

to 30 percent, creating silent base station sites. See Product Materials Materials Breakdown Breakdown the press release. 100% Product Materials Breakdown Our products are comprised predominantly of metals – more than 90 percent of the total weight in most 80% 80% products. Aluminum is the most significant metal, which is used in sheet metal for cabinets and chassis, and in castings for heat sinks. Alloyed steels are also 60% used for structural parts. Copper and tin are the 60% chief metal constituents in printed wiring boards and 40% cable conductors. Tiny amounts of precious metals – gold and silver – are used in special components 40% such as integrated circuits and as electrical contact 20% finishes on printed wiring boards and connectors. Aluminum Polycarbonate Polymer plastics such as polycarbonate are used 20% Aluminum Steel for housings in residential-type products such as 0% the Nokia WiFi Access Point. Epoxy resins are used Metals: Aluminum, Steel, Plastics: Polycarbonate, Minerals: Glasses, Other organics: Epoxies, Aluminum Polycarbonate Brass,Aluminum Copper, Tin Steel Polyethylene, Polypropylene, Ceramics, Metal Oxides Hardeners, Stabilizers, for the insulating build-up layers of printed wiring 0% Nylon Pigments boards. Crystal polymers are used for connector Metals: Aluminum, Steel, Plastics: Polycarbonate, Minerals: Glasses, Other organics: Epoxies, housings. Inorganic materials are chiefly comprised Mobile Networks Product Fixed Networks Product (WiFi IP/Optical Networks Product (1830 (AirScaleBrass, BTS Indoor Copper, (LTE)) Tin Polyethylene,Access Point (HA-030W-B))Polypropylene, Ceramics,Photonic Metal Service Oxides Switch (PSS-24X))Hardeners, Stabilizers, of minerals such as silicate glasses that are woven Nylon Pigments into reinforcing for epoxy resin-based printed wiring Based on product life cycle assessments of typical confi gurations. Largest shares of single materials by product stated inside boards. Minute amounts of other organic materials the bars. Mobile Networks Product Fixed Networks Product (WiFi IP/Optical Networks Product (1830 are employed as hardeners, stabilizers and pigments (AirScale BTS Indoor (LTE)) Access Point (HA-030W-B)) Photonic Service Switch (PSS-24X)) in components. The total weight percentage of these material types for three Nokia product examples are Based on product life cycle assessments of typical confi gurations. Largest shares of single materials by product stated inside the bars. shown graphically on this page. According to life-cycle assessment, the use phase accounts for the majority of the global warming potential caused by our typical products.

Nokia People & Planet Report 2018 Nokia today Our approach Connectivity Environment Integrity People Together Key data Assurance 67 4.5 Our products and networks – energy efficiency and carbon emissions

Our products Nokia Bell Labs predicts that in • human cognitive operation: Human assistance and Creating such a Future X Network from an the next five to ten years, a new task automation at machine scale environmentally sustainable point of view means, at and networks • personalized protection: Enable dynamic, the very least, minimizing the environmental impact digital fabric will be created that contextual security and trust at terascale of our products in use. This contributes to reducing the greater part of our carbon footprint, but we also – energy augments our intelligence and In the last few years alone, Nokia Bell Labs innovations try to maximize the use of our products and services enables the automation of every have led to a complete turnaround in Fixed Networks to bring positive impacts through automation, efficiency (vectoring innovation) and Optical (100G Coherent connectivity, efficiency, resource management, and mundane task and the intelligent detection innovation), and we are now pioneering the digitalization. The emerging challenge will be to and carbon assistance of every complex task. creation of 5G network technologies as well as novel IP address the energy demand of these exponentially and Optical routing algorithms and new analytics and increasing data-intensive services as they become emissions Enterprises and industries will be deep learning techniques. more thoroughly embedded into normal, everyday life. massively transformed by the Currently researchers are working on projects In 2018, we continued to make energy efficiency ability to become automated and to disrupt the field by a factor of 10x. What that improvements across our product portfolio, supported virtualized. means is 10x more capacity, 10x lower latency, 10x customers with optimization and energy services – for better energy consumption, 10x better reliability example, through Nokia Bell Labs Consulting, further or 10x performance in some dimension. Every promoted the use of renewable energy sources, and researcher works on a 10x challenge somewhere in provided software solutions to help manage and To achieve this technological revolution, the the end-to-end network, from device to compute analyze energy consumption. We look at our whole underlying network has to become highly distributed and applications as well as the control plane product life cycle as part of Design for Environment, so to support the onslaught of virtual reality, the systems in between. This individual research is that we understand where the greatest environmental massive scale of devices (things) as well as the need bundled into what we call Future X projects that impacts lie, and how research driven innovations can to analyze the data coming from these devices. We seek to create innovations across all the major minimize or even reverse those impacts. believe a new network will emerge, the Future X dimensions of the network; from wireline and Network, and it will need to provide and deliver the wireless access into optical transport, IP routing, Read and view more on the Nokia Bell Labs Future X following fundamental, digital needs: the control systems, data center architectures, and Network at: www.bell-labs.com/our-research/future- • seemingly infinite capacity: 100x capacity growth a common network operating system that controls x-vision. in less than ten years everything and makes the different parts of the • imperceptible latency: Millisecond latency for network look like one seamless whole. The ultimate In the book The Future X Network: A Bell Labs networks and new ‘human’ services goal is to “create time” for humans through the Perspective, it is stated that global annual network • terascale things: Optimize Total Cost of Ownership automation of everything. People will be able to energy spend is expected to quadruple by 2025, for a trillion things interact with any media, object or person, anytime from USD 95 billion to USD 343 billion. The need to • global-local alliance: Massive distribution of cloud anywhere and mundane tasks can be handled by decouple data growth from energy usage has never infrastructure with global federation the network. been greater.

Nokia People & Planet Report 2018 Nokia today Our approach Connectivity Environment Integrity People Together Key data Assurance 68 4.5 Our products and networks – energy efficiency and carbon emissions

Traditional base station site Zero emission base station site

Traditional way of working leads Reduce emissions by Average lower energy +2°C to global warming -70% AirScale Base Station -43% consumption in 2018 cases

Increased traffi c requires no additional equipment Increased traffi c: separate equipment for 2G, 3G, 4G needed The radio antenna system saves space, reduces feeder losses, and maintenance

Air conditioning Cooling and shelter needed Weatherproof equipment, BTS no shelter needed Rectifier BTS Rectifier 2G Uses up to 70% less energy 3G Batteries Batteries 4G Becomes optional for renewable energy sources

5G is natively greener technology than 4G and can minimize the energy consumption of the Massive market an energy efficient backhauling system based provide more traffic with less energy thanks to new MIMO products in all traffic conditions. on mature and low-cost components. This new standardized features like Lean Carrier and Massive system is currently studied in close collaboration with MIMO. Nokia is in addition investing heavily to The convergence, Wi-Fi, 5G and LiFi (Light Fidelity), Mobile Networks Business Group where perspectives improve the energy efficiency beyond the features foreseen as a promising technology for the next for the industry 4.0 are also envisaged. One first goal standardized in 3GPP, and as an example we are years, opens new challenges. Our target in Nokia is to demonstrate the support of high bandwidth developing energy efficiency software features to Bell Labs Research was to propose for this emergent applications, and the convergence 5G, Wi-Fi and LiFi

Nokia People & Planet Report 2018 Nokia today Our approach Connectivity Environment Integrity People Together Key data Assurance 69 4.5 Our products and networks – energy efficiency and carbon emissions

in an integrated demonstrator between Nokia Bell efficient networks compared to individual networks 30–40 percent gains at 20 percent average load. This activity Labs and our Mobile Networks Business Group. which have idle resources consuming energy without Read more in the white paper 5G network energy supports SDG producing anything. 2018 has marked a significant efficiency. Towards zero emissions Target 7.3: year of change in the market as our SRAN solution For mobile service providers most of their carbon is now used in over 14 percent of all Nokia base The combination of greater energy efficiency and “By 2030, double the global rate of improvement in energy emissions come from the radio access network. Our station sites globally. We are currently developing more cost-effective renewable energy sources are efficiency” AirScale radio base station solution (BTS) spearheads 5G support for our SRAN solution which will help our transforming the economics of radio access. Our our commitment to helping our customers build a 5G customers gain the same benefits. We expect Science Based Target (SBT) for Scope 3 emissions sustainable business supported by a zero emissions the SRAN solution to reach 60 percent of our base covers emissions from customer use of our products, network. Innovative hardware and intelligent software station sites globally by 2022. by far the greater part of our total carbon footprint. cut base station energy consumption. Our target is to reduce these emissions by 75 percent We have further enhanced the energy efficiency by 2030 compared to 2014 baseline. The SBT scope R&D progress of our AirScale radio products by delivering more is smaller than our total Scope 3 emissions from use Through 2018, we have dramatically expanded our powerful energy saving software features, such that of sold products, and products within the scope of AirScale Radio portfolio (4x more references), by higher savings can be achieved even in medium/busy the SBT represent the two most energy consuming introducing a wide range of single-band and multi- traffic conditions. Over 140 customers have installed segments of our Networks business product portfolio. band Remote Radio Heads, as well as 6-pipe AirScale energy efficiency software features to our products. We concentrate on the long-term trend line, as Radio Frequency Module, exhibiting a peak energy In 2018 we experienced clear increase in market product development takes time and is a step-by- efficiency at unit level as high as 34 percent across demand and for the first time ever over 10% of the step process. The trend line is not linear and we can various frequency bands. AirScale portfolio deliveries Nokia radio products in the field have one or more see that emissions are relatively stable during the have represented more than 40 percent of all our energy efficiency software features activated. initial years, but over time emissions will decrease. Macro BTS deliveries over the year, and shipped We are currently on track. In 2018 the amount of baseband capacity has increased by over 50 percent We have demonstrated a Remote Radio Head (RRH) sold products increased including newer products while keeping the energy footprint almost unchanged featured with a new Power Amplifier (PA) architecture where energy efficiency (performance vs energy (+2 percent). breakthrough, delivering more than 20 percent use) was much better, though pure product energy energy savings compared to traditional PA. consumption was in certain categories greater due to Our Single RAN (SRAN) solution typically enables increased functionalities. 45 percent lower energy consumption compared The energy efficiency of mobile networks can be to the traditional way of building separate 2G, 3G significantly improved by using 5G power-saving In 2018, we continued to develop and offer our zero- and 4G radio networks. The idea behind SRAN is features, by small cell deployments and by new emissions radio network solutions, including energy- that with a single software and shared common 5G architecture and protocols. 5G has a significant saving software features and services. We delivered hardware we are able to build a network that potential for reducing energy compared to LTE by zero emission products to over 140 customers can support any radio technology concurrently. using sleep modes at low load – up to 50–60 percent worldwide, and the networks we modernized Furthermore, due to sharing of resources between gains at the base station level when networks brought on average energy savings of 43 percent different technologies, we can build much more operate at 10 percent average load, and up to for our customers. This not only reduces energy

Nokia People & Planet Report 2018 Nokia today Our approach Connectivity Environment Integrity People Together Key data Assurance 70 4.5 Our products and networks – energy efficiency and carbon emissions

%ofgreenhousegasemissionsfromdifferentproductlifecyclestages consumption and reduces carbon footprint, but also 100% brings financial savings for our customers. 100% 95% 93% 93% 95% 89% 89% More information on zero emissions is available at 80% networks.nokia.com/airscale/target-zero-emissions. 80% “Verizon's goal of a 50 percent carbon 60% intensity reduction from 2016 to 2025 60% means that energy efficiency is essential 40% to our sustainability strategy. As consumer

40% demand for data grows, a more efficient network enables us to transmit more 20% 10% information using less energy per bit.” 7% 20% 5% 1% 2% 1% -1% -1% ~0% 0% 10% We are working on energy efficiency across our 7% 5% -20% product portfolio. In the fixed access segment, we are 1% 2% 1% -1% -1% ~0% 0% Raw material acquisition Transportation2 Usage3 End-of-Life4 bringing cloud and Software Defined Access Networks 1 and production (SDAN) solutions to increase the overall efficiency -20% Mobile Networks, typical Fixed Networks, typical product Optical Core Networks, typical of networks, including power efficiency. Our SDAN 2 3 4 productRaw material (design acquisition lifetime 10 years) Transportation(design lifetime 7 years) productUsage (design lifetime 15 years)End-of-Life solution enables fixed access network slicing, which is 1 and production a very environmental concept: no excessive digging for 1 Raw material acquisition, production, and associated transportation parallel fiber networks in the ground, no duplication 2 Transportation of theMobile fi nished Networks, product typicalto its point of installation Fixed Networks, typical product Optical Core Networks, typical of patching room space, and reuse of the same 3 Product use at customerproduct site, (design starts from lifetime installation, 10 years) ends at de-installation(design lifetime just before 7 years) the transport to end-of-lifeproduct treatment (design lifetime 15 years) 4 Starts with the transportation of de-installed goods and ends with the waste treatment, the fi nal disposition of the product hardware and fiber infrastructure which can be shared after its useful life for various services, vertical industries, and network 1 Raw material acquisition, production, and associated transportation operators. Another example of how Nokia SDAN 2 Transportation of the fi nished product to its point of installation Based on product life-cycle assessments of typical confi gurations. Calculated with constant electricity usage @ 1kW. solution saves energy is our Gainspeed Distributed 3 Product use at customer site, starts from installation, ends at de-installation just before the transport to end-of-life treatment Access Architecture solution for cable operators. By 4 Starts with the transportation of de-installed goods and ends with the waste treatment, the fi nal disposition of the product moving control/management functionality to the after its useful life cloud, this solution eliminates as much as seven times the amount of the equipment in the central office and Based on product life-cycle assessments of typical confi gurations. Calculated with constant electricity usage @ 1kW. reduces the energy consumption by a factor of eight.

Nokia People & Planet Report 2018 Nokia today Our approach Connectivity Environment Integrity People Together Key data Assurance 71 4.5 Our products and networks – energy efficiency and carbon emissions

We are the only global vendor that offers a networks, while also reducing power per bit by Scope 3 CO2e-emissions from customer use of sold comprehensive set of fiber (FTTx) solutions that 60 percent. Networks built with systems using the products reduced by 4% from 2017 now also includes a combination of fixed and new chipset require up to 35 percent fewer optical wireless technologies with products launched transponders, resulting in significant long-term in the first half of 2018. This approach enables savings, and a reduced carbon footprint. 50 operators to have fiber deep in the network and e 42.9 40.2 use licenced (4G, 5G) or unlicensed (WiGig) wireless The evolution of Nokia Microwave transmission 40 38.4 technologies to deliver gigabit services to users’ products takes into account key sustainable homes. In a typical scenario, the communications development principles like the energy efficiency 30 service provider would bring fiber to each side of improvement from one generation to the next. There a street and use wireless Passive Optical Networks are two main areas that contribute to the improved 20

(PON) to connect users in the street, eliminating energy efficiency of these products. 2 CO tons Mega metric the need to dig up streets and open building walls 10 to install fiber. Our current solution also includes Firstly, at the equipment level, particular care to 2016 2017 2018 user modems that have over three times less power decrease the energy necessary to transport every consumption than the industry norm. bit over a given distance, while maintaining high- Product use time varies between 6 and 15 years, depending on the products. Energy use calculations are based on product group quality at the transport level, is considered one of specifi c ETSI standards wherever standards have been published. In optical networks, in 2018 we announced the the primary goals. As an example, the introduction In 2017 –2018 data has 100% business group coverage of Nokia’s next generation of our Photonic Service Engine of a new class B power amplifier driven by a powerful Networks business and estimated at least 90% coverage of (PSE) family of super-coherent digital signal digital radio frequency closed loop pre-distorter, product portfolio. processors, underscoring our leading position in allows significant savings compared to previous the industry and our innovation pedigree. The traditional class A power amplifier. Nokia PSE-3 is instrumental in the evolution of communication service provider networks to meet Secondly, at the system level, considering In the routing and switching domain, our silicon the surging traffic demands of video, cloud and 5G, the evolution of the network, and the future innovation drives other fundamental benefits in by maximizing the capacity and performance of potentialities enabled by machine learning and system efficiency. Each generation of FP silicon every link in their optical networks. The new PSE-3 Software Defined Networks, we are studying network processor provides unprecedented speed, chipset is the first coherent digital signal processor specific mechanisms that can be useful for saving scale and functionality while being more energy to implement probabilistic constellation shaping energy. For instance, we are investigating the efficient. The new FP4 is the industry’s first multi- modulation technique pioneered by Nokia Bell equipment capability to reconfigure itself from a terabit network processor silicon and provides a Labs. This modulation scheme pushes optical fiber full traffic capacity and most energy demanding 6x performance improvement over the previous transmission capacity to very near the Shannon working state, to a lower traffic capacity demand generation of FP while providing an over 50 percent Limit. It generates wavelengths that are more and less energy hungry working state, that can decrease in watts per gigabit of throughput. This resilient to noise and other impairments, increasing anyway satisfy the actual request of traffic capacity also comes with an up to 4x increase in features capacity up to 65 percent over currently deployed and quality of service. and scale.

Nokia People & Planet Report 2018 Nokia today Our approach Connectivity Environment Integrity People Together Key data Assurance 72 4.6 Our own operations - energy efficiency and carbon emissions

Biogas circular case Our own As defined in our Science Based deployed across our portfolio in both new and Targets (SBT), we have committed refurbished buildings with projects implemented in all operations regions along with improved Heating, Ventilation and to decrease our Scope 1 and 2 Air Conditioning (HVAC) controls including products such as Ultrabox and Aironics, all aimed at reducing Home - energy emissions, that is emissions from our energy use. our own operations, by 41 percent efficiency These best practice projects and techniques were by 2030, compared to the shared across the Real Estate organization so that and carbon 2014 baseline. further reductions and efficiencies can be achieved. Sharing knowledge, increasing staff awareness and Nokia Employee use Gas offi ce station emission In 2018, for example, our electricity consumption creating a culture of efficiency was promoted through of company car across our facilities decreased by 3 percent as a variety of campaigns, standards and tools, and compared to 2017 and 27 percent of our total communication. purchased electricity was from renewable sources. These actions reduce our Scope 1 and 2 emissions Real Estate implemented a global environmental data and help us in reaching the long-term climate target. collection and reporting tool which, together with Leisure Currently we are well on track. the new Waste Management Guidelines, has seen time an increase in the number of sites reporting their Bio waste Bio gas In 2018 our Real Estate team maintained its focus utility data. We supported Earth Hour and through on developing and delivering efficient facilities in our Switch Off Campaign reinforced the message line with our overall company goals and SBT targets. of energy conservation to all staff within our Biogas In the area of energy efficiency, all the real estate facilities. We continue to encourage consideration plant regions made considerable contributions to the of sustainability in the selection, development, Other sources overall energy saving of 68 000 MWh representing management and disposal of our facilities. a 5 percent reduction on our 2017 consumption. Larger capital investments included total cost Employee transportation of ownership techniques, the delivery of energy efficient and environmentally friendly projects Our car fleet such as new chillers in India and China, and boilers In 2018 we reached a significant milestone with our in the UK and France, as well as building envelope company car policies, reducing the carbon footprint upgrades in Finland and France. of our car fleet at our headquarters in Finland. The first green company car policy was implemented We also investigated and installed solar panels at in Finland in 2008, having a set baseline of 179 g/ our site in Portugal. LED lighting continued to be km average CO2 emissions for new car leases. Ten

Nokia People & Planet Report 2018 Nokia today Our approach Connectivity Environment Integrity People Together Key data Assurance 73 4.6 Our own operations - energy efficiency and carbon emissions

years later, in 2018, our average emissions of new car Virtual meetings increased, business travel emissions decreased leases in Finland was 88 g/km, taking ten years to cut the emissions in half. This provides a great example Air travel CO₂e emissions Webex and video hours of a long-term commitment to reduce emissions in (metric tons) (million hours) our own operations. Our emissions have been on 100 000 25 average almost 25 g lower than the market average of new passenger car registrations during these years. 80 000 20 It is also notable that a company’s impact on car emissions in a country is significantly longer than +14% the 3-4 years shown in most reporting. The average 60 000 15 scrapping age of cars in Finland is over 20 years, thus our low emission cars remain on the used car -16% market for another 17 years after our reporting 40 000 10 period. When company registrations represent almost half of the new registrations on the market, the impact of company car policies on passenger car 20 000 5 emissions is significant.

In 2018, we continued innovative approaches to 0 0 reduce the carbon footprint of our fleet in Finland 2017 2018 and introduced a new company car policy, promoting

gas cars with bio gas cards. This underscores our Air travel CO₂e emissions Webex and video hours circular economy approach as biofuel is produced from renewable waste. For example, all bio waste from our canteens is collected for gas production. a reduction of 7 percent in greenhouse gas emissions based on the number of miles flown. In 2018, our We had smaller than anticipated impact from the from the car fleet, compared with 2017. CO2e emissions related to business travel were CO2 measurement as a result of the change from the around 82 000 metric tons, meaning a 16 percent New European Driving Cycle (NEDC) to the Worldwide Reducing our travel footprint decrease when compared to 2017. Emissions were harmonized Light vehicle Test Procedure (WLTP) as Business travel includes flights, rail, rental cars, taxis, also reduced as our employees no longer needed the first countries to fully implement it were Finland and public transport. Our reporting is based on the to travel in relation to the Alcatel Lucent integration and Germany. The reduced carbon intensity and biggest contributor to business travel emissions, as was the case in 2017. We also continued internal reduced number of cars in our combined fleet led to air travel, for which we calculate the CO2e emissions lobbying and guidance to reduce the need for

Nokia People & Planet Report 2018 Nokia today Our approach Connectivity Environment Integrity People Together Key data Assurance 74 4.6 Our own operations - energy efficiency and carbon emissions

internal business travel and encouraged the use of Emissions from diﬀ erent modes of employee commuting [% of CO2e] virtual meetings. Emission source Percentage The use of virtual hours (webex people hours Car alone 73% and video conference room hours) increased by Carpool 7% 14 percent in 2018 when compared to 2017. This Train 6% was enabled by IT, supporting virtual meetings Subway, metro, tube or tram 5% with increased capacity and quality. Nokia had 330 Bus 4% videoconferencing facilities at the end of 2018. Motorcycle 4% Vanpool or minibus <1% During 2018, we also continued to encourage the use of electric or low-emission cars, organized Walking, biking and working remotely are considered shuttle buses between hotels, offices, and airports, zero emission commuting methods. and encouraged employees to use public transport.

The Future of Mobility, which leans more towards a mobility budget-type of offering, provides flexibility We had also an awareness raising part in the survey. Network – an open co-creation environment initiated for employees and better use of existing assets and We found out that employees who drove cars alone by Nokia www.open-ecosystem.org. services. This approach will combine both business were ready to consider public transportation if that travel and car fleet, with the aim to further reduce service were easily available. We also found out that In 2018, the Helsinki Regional Transport authority the carbon footprint of our own operations. The awareness of car CO2 emissions is considerably (HSL) chose Nokia as the winner of the 2018 latest pilot case of this was announced in Finland at higher in the countries where either Nokia or Commuting Forerunner Award as the company the end of 2018, to start in Q1 2019. This pilot will authorities have set benefits or restrictions related actively encourages its employees to walk, cycle, utilize the Mobility-as-a-Service (MaaS) solution for to car CO2 emissions. use public transport or carpool. The Commuting commuting tickets and mobility budget including Forerunner Award is given to an employer who small car, public transportation, city bikes and taxis. The recently published New Shared Mobility Study strongly drives for more sustainable commuting and on Helsinki suggests that replacing private car business travel while at the same time increasing and Employee commuting travel with shared vehicles would end congestion, supporting wellbeing. To read more about the ways We conducted an employee commuting survey in cut emissions, and free up public space. Under our in which we have encouraged our employees to travel 2018. Countries selected to survey represent over Global Operations umbrella, Travel & Fleet and the and commute wisely visit our website. 80 percent of employees. Responses were adapted Innovation Partner and Venture Management (IPVM) to the total headcount. Most of the employee Ecosystem Advocacy teams took action to test Product transportation and distribution commuting emissions come from single person solutions supporting the future development of We aim to limit the use of natural resources. In car use. Remote work, walking and bicycle were mobility and towards a zero-emission digital future transportation, we always drive to save space, considered as zero emission commuting. by launching challenges in the Open Ecosystem reducing the amount of packaging materials used, and

Nokia People & Planet Report 2018 Nokia today Our approach Connectivity Environment Integrity People Together Key data Assurance 75 4.6 Our own operations - energy efficiency and carbon emissions

maximizing our transport efficiency through pallet or an increase of 29 percent over the previous year. Share of transportation modes container load optimization, eliminating the need for The main reason for the higher emissions was an additional trucks or containers where possible on both increased amount of deliveries. 60% inbound and outbound shipments. Reuse of packaging materials also contributes to reductions in CO2 For 2019, our focus will be to further positively 42% 44% 42% 41% emissions from deliveries. In 2018, we reduced use of impact the environmental efficiency of the 40% new packaging materials by 4 200 metric tons (3 700 in transportation of components from our suppliers 2017) by taking the packaging coming from suppliers to us and also highlight the issue to the customer 16% and reusing it in customer deliveries. Our packaging projects with highest air shipment percentage. 20% 15% designs use recycled materials in all aspects of our packaging where possible. OEM (original equipment We also have a marine fleet related to our 0% manufacturer) packaging, such as packaging for separately managed undersea cables business, Sea Air Road cabinets, antennas, batteries, and cable reels, is Alcatel Submarine Networks (ASN). The greenhouse typically 100 percent re-used. gas emissions decreased in 2018 by 3percent 2017 2018 compared to 2017. As regards to the growing discussion and regulation around plastics, we are fully aware of the EU single- Our supply chain – energy efficiency use plastics directive and will fulfill our obligations. At and carbon emissions the beginning of 2019 we kicked off a focus project The main target for our environmental work with to analyze our plastic use across the value chain suppliers is to encourage key suppliers to report based on the current standardization work ongoing their climate impacts and set carbon reduction to define single-use plastic terminology for our targets through the CDP Supply Chain Program. industry. We will report on our activities concerning This helps us to plan improvement programs with single-use plastics in next year’s report. our suppliers and improve reporting of our Scope 3 emissions. For more detailed information please To drive improvements in our transportation and refer to the Responsible Sourcing section on pages distribution, we look at the most energy efficient 106–112 of this report. Activities related to our ways of transporting components from suppliers to product transportation and distribution suppliers us, and in delivery of our products onwards to our are described in earlier sections of this chapter in customers. connection with our own operations.

In 2018, our Scope 3 GHG emissions related to upstream transportation, and distribution of our products stood at around 384 330 metric tons CO2e,

Nokia People & Planet Report 2018 Nokia today Our approach Connectivity Environment Integrity People Together Key data Assurance 76 4.7 Waste in our own operations

Waste in our Waste in our own operations is Types of waste generated by our own operations something we take seriously, and own operations we have put in place a variety Non-hazardous waste (other), 62% Metal, 2% of waste reduction, reuse, and Paper and cardboard, 16% Construction waste, 1% recycling programs. Wood, 9% Hazardous waste (WEEE), 4% Biowaste, 3% Company policy dictates that all hazardous and Plastics, 2% electronic waste processing facilities utilized by Nokia facilities and operations, including Asset Recovery, shall undergo a Health, Safety & Environmental (HSE) Liability Assessment. Our hazardous and electronic waste shall only be shipped to processing facilities that are on an HSE Approval List. The requirements for the HSE liability assessment vary based on risk, which is dependent on waste quantity, shipment frequency, which has improved the accuracy of our reporting. more accurate baseline against which to set future waste type/toxicity, waste treatment technology, Estimated waste is calculated on the basis of targets and measure performance against them. environmental management systems, location, legal headcount and given the amount of waste per requirements and prior assessments. The goal is to employee remains similar to previous years, the Applying reuse to lead-acid maintain the minimum number of approved waste overall total for 2018 remains in line with this. batteries in the USA processing facilities needed to meet required services Our facilities operations within the United States and minimize environmental liability. In 2018, we Previous calculation methods allocated waste in generate spent lead-acid batteries and we ensure that completed eight HSE liability assessments of e-waste every category to any sites requiring estimated the potentially harmful chemicals in the batteries are recycling facilities located in the Philippines, USA, data. The new calculation method only assigns available for reuse in new batteries. We utilize a battery Indonesia, India, China and Hungary. Mixed Waste – Landfill to estimated sites as manufacturer that operates a closed-loop system these sites do not segregate and measure waste which recycles virtually 100 percent of each spent Overall, year on year, the total facilities waste for recycling. These new improvements to the lead-acid battery, including the lead, plastic, steel and reduced by 9 percent. During 2018 we improved the calculation methodology have improved accuracy acid. This accounts for approximately two-thirds of all transparency of our waste report with a review and and reduced the amount of waste estimated by lead used in their manufacture of new batteries. Nokia update of our waste categories and our calculation ~20 percent. At the same time this new estimation recycled approximately 37 metric tons of lead-acid methodology. By improving the waste descriptions, method has increased the share of reported batteries from US operations in 2018, resulting in the our facilities are better able to understand and landfill up to 52 percent (20 percent in 2017). The recovery of approximately 26 metric tons of lead for assign the waste generated to the correct categories new calculation methodology enables us to set a use in the manufacture of new batteries.

Nokia People & Planet Report 2018 Nokia today Our approach Connectivity Environment Integrity People Together Key data Assurance 77 4.8 Circular practices and products

Circular practices We apply a circular economy with many cities set to go smart and green. Nokia “Nokia has shown leadership and ambition approach, for example, offering an was nominated in the Electrical and Electronic in sustainability by embedding circular Equipment Recycling Company of the Year category. and products Asset Recovery Service, including economy principals in their vision and Also this year, Nokia Shanghai Bell won the 2018 operation model as well in business refurbishment, reuse, and recycling EUCCC CSR Award – Excellence in Responsible Value development.” of older equipment as part of Chain, recognizing us for the excellence in integrating sustainability into the whole value chain and creating Jyri Arponen, Senior Lead, Business development, Circular Economy, Sitra The Finnish innovation Fund product lifecycle management. shared business and social impact. We are turning In 2018, through our voluntary our supply chain from linear to circular by reusing our products, thanks to Special Customer Operations. programs, we sent around 4 100 During the past 27 years (since 1991), our circular (2 600 in 2017) metric tons of old supply chain has successfully brought benefits by A regulated producer means any person who delivering over tens of thousands of remanufactured manufacturers and sells or resells under another telecommunications equipment for products worth millions of euros to hundreds of brand or imports regulated products such as covered materials recovery and we reused customers worldwide. A circular supply chain is one electrical or electronic equipment (EEE), batteries and of the many actions we implement with the belief packaging into an EPR regulating country. A producer approximately 56 000 (68 000 in in doing the right thing using Nokia technology can be the company’s corporate and/or local country 2017) units. inventions. legal entity. Companies that place covered products Extended Producer Responsibility (EPR) In 2018 we were honored to be recognized by the Compliance with relevant environmental regulations Middle East Waste and Recycling Awards for success is an important part of our environmental policy. Product take-back in adopting best practices in the environmental Extended Producer Responsibility (EPR) regulatory management business. The event recognized the programs strive to decrease the environmental outstanding individuals and organizations in the impact of covered products by making the Middle East that have demonstrated leadership manufacturer responsible for the entire life cycle of and innovation in their respective fields and the product, especially end-of-life (EOL) management Recycled, 95.7% have significantly contributed to environmental through product takeback. Since 1994 almost every sustainability along with economic viability. The OECD member country has implemented one or 99.5% Energy recovery, 3.8% utilized key theme for the event was the urgent need to more EPR programs. Country EPR programs are Utilised landfi ll, 0.5% now focus on the environment and protecting our expanding in scope (covered products and packaging) natural resources for future generations. Organizers and globally (EU, Japan, South Korea, China, India, pushed the message that governments and private Canada, Peru, and others). entities are all aiming to become sustainable,

Nokia People & Planet Report 2018 Nokia today Our approach Connectivity Environment Integrity People Together Key data Assurance 78 4.8 Circular practices and products

on the market are responsible for their proper EOL packaging placed on the market, as well as the legal and future recycling technologies, and regional management and are required to register and report entity that was involved in the sales and/or import. market factors in reusing and recycling electronic to impacted country authorities. Producers bound Reporting systems need to be modified to comply products. The goal is to have designers use the by EPR legislation must handle EOL management with new or revised country reporting requirements, metric as a means of scoring their product design of covered products and packaging individually or updating of legal entity names and product early in the development process and then making delegate EOL product takeback responsibility to a third descriptions and de-registrations when no longer suitable changes to improve that score. The party Producer Responsibility Organization (PRO), also selling or importing into a regulated country. industry group has developed a framework for the called EPR compliance schemes which are paid by the metric, which was presented at the Electronics Goes producer. PROs typically are responsible for takeback Increasing product value Green – CARE Conference in late 2018. Nokia and of post-consumer products (collection and treatment recovery at end of life the iNEMI work group plan on refining the reuse and of product at EOL) recycling target compliance and We also worked over the past two years with other recycling metric in 2019 with further research and reporting to national authorities. PROs must have a industry leaders through the iNEMI organization development in the future recycling technologies monitoring system for quantities that have been put (www.inemi.org) to develop a metric that can and the regional market factors. The tool created on the market, collected and recycled. address product value recovery at end of life. It by the project team is being developed for industry focuses on the value of components and materials use, and can be beta tested by visiting the iNEMI EPR program stakeholders include government at end of life, their ease of liberation with current project website. authorities, producers, waste management organizations and PROs. EPR programs vary considerably due to differences in covered products, collection targets, and how responsibilities are shared among stakeholders. As EPR requirements differ between countries, the role of the PROs vary as well A case on product take-back with differences in the type of responsibility, cost, and implementation procedures. Required reporting While preparing for the launch of a critical new technology last year, we were able to maintain and grow information varies by country and can include the data network of a major US carrier by delivering refurbished mobile network units. After recovering quantities/types of covered products and packaging used equipment from around the world, we refurbished, warranted and delivered 15 442 circuit packs placed on the market (sold or imported), collected, to provide new service and ensure the ongoing integrity of the network. By strategically utilizing the and treated in-country versus exported. remaining high value of used Nokia equipment, instead of manufacturing new units, we were able to, in this particular case example, avoid the creation of 1 235 metric tons of CO2 emissions, which is We report products and packaging sold or imported equivalent to taking 262 passenger vehicles off the road for a full year. into EPR regulated countries. Our integration of IT data systems is required for product and This circular supply of products, bringing used units back to like-new condition for resale and reuse, is packaging basic data, delivery relevant data, and provided across the portfolio. environmental reporting relevant data. This is required to identify covered EEE, batteries and

Nokia People & Planet Report 2018 Nokia today Our approach Connectivity Environment Integrity People Together Key data Assurance 79 4.9 Water

Water Our biggest influence on indirect sustainability viewpoint. This approach considers the Water in our own operations water withdrawal is from the environmental impacts associated with all stages of a Where possible we measure the total water use in a product’s life cycle: building which may include water used for cleaning, generation of electricity used to • raw material acquisition and production (including catering, toilets and business group operations. materials extraction, intermediate manufacturing, However, these activities are not submetered power our products in customers' final product assembly and test, and packaging) separately. networks. We have analyzed our • transportation (storage, transport and final installation of the complete product at the Our greatest water withdrawal in our own operations impact on water withdrawal based customers’ premises) occurs in sanitary use: flushing toilets and in the on a thorough life cycle thinking • usage (usage, repair and maintenance of the cleaning of facilities. We have water-based air cooling product at the customers’ premises) and in several facilities, but this is a closed cycle. Our from product inception to final • end-of-life disposition (removal of the product and laboratories are mostly similar to data centers, where disposal. We have determined its processing for end-of-life disposition such as water withdrawal is mainly caused by air cooling. We refurbish / reuse, recovery, and recycling). only have a few factories and those are final assembly that the most environmentally factories. Processes in our factories use mainly impactful water withdrawal comes The environmental impacts associated with these electricity and water does not play a significant role product life cycle stages are then assessed by other than for air cooling (closed water cycle). indirectly through the use of following our Design for Environment (DfE) process. our products. We have a limited number of facilities where we have As the use phase of our products has the greatest responsibility for irrigation since we lease most of indirect impact on water withdrawal where electricity is our facilities. Where we are responsible, we aim to generated to power these products, we strive to design be as efficient as possible. We recognize there are Life cycle assessment (LCA) shows that the our products with innovative features that reduce areas with water scarcity and in those areas, we take predominant amount of water withdrawal results power consumption (see more on energy efficient extra care of water withdrawal by monitoring and from the generation of electricity used to power products on pages 68–72). promoting awareness among facility operations. our products in our customers’ networks. As our Where it is within our control, we will focus on those products consume electricity during their relatively Estimates of the water withdrawal amounts for sites in the top 20 that are located in countries long design lifetime – 10 to 15 years for many of various Nokia product types have been determined identified as being in the Extreme and High Risk them, our biggest influence on water withdrawal is based on historical product information over categories and we will work to influence building to reduce power consumption over the product’s their respective life cycle stages. By using product owners to make similar commitments. use time. information coupled with environmental impact life cycle databases for electronics components, we have In 2018, we used 1 791 000 m3 (2 305 000 m3 in Product impact on water withdrawal summarized in the Water LCA Graph the percentage 2017) of water. Water use decreased by 22 percent We employ product life cycle thinking in how of total water withdrawal over the four main life cycle compared to 2017, as water conservation measures we develop products from an environmental stages for three Nokia product types. were enhanced compared to the previous year. In

Nokia People & Planet Report 2018 Nokia today Our approach Connectivity Environment Integrity People Together Key data Assurance 80 4.9 Water

addition in 2018 more accurate water data was %ofwaterfromdifferentproductlifecyclestages obtained as less estimated data, which was more conservative, was employed. 100% 96% 94% 97%

In 2018, we aimed to reduce water consumption by 2 percent from 2017 levels but were able to achieve 80% an impressive 22 percent reduction.

Water in our supply chain 60% 2018 was the first year of active engagement on water issues with our suppliers. We have identified supplier categories where water may be a material 40% risk and initially addressed them through a water assessment program. 20%

As a result of our water assessment campaign, 150 6% 4% 3% of our top manufacturing suppliers representing ~0% ~0% ~0% ~0% ~0% ~0% 0% 19 percent of total spend, participated in a water Raw material acquisition Transportation Usage End-of-Life assessment via CDP water assessment program. and production Out of participating suppliers, 63 percent (94) had Mobile Networks, typical radio product Fixed Networks, typical product Optical Networks, typical product (design lifetime 10 years) (design lifetime 7 years) (design lifetime 15 years) undertaken a water-related risk assessment for their direct operations and 41 percent have identified Based on product life cycle assessments of typical confi gurations. Please see a list of processes included in each of the life cycle actual water-related risks in their operations such stages next to product greenhouse gas life cycle assessment chart on page 71. as increased water stress, flooding and higher water prices. 23 percent (34) of the responding suppliers also engaged with their own supply chain on water commitment to water stewardship and collective A structured target is considered to be one with risk, and a further 9 percent are planning to do so action, description of business impact on water and a defined level (e.g. company-wide or basin), any in the upcoming two years. In comparison with our description of water-related performance standards quantified metric (e.g. percent reduction in total direct suppliers, who saw water stress, flooding and for direct operations as well as company water water consumption), and an end year. prices as core risks, tier 2 suppliers see also drought targets and goals. and increased water scarcity as issues. Currently, a comparison to industry level responses 68 percent (102) of the suppliers reported water in CDP Water is challenging due to the small amount 55 percent (88) of the suppliers have a company- consumption information and 61 percent (91) of companies from our sector. wide water policy, including elements such as water discharge information. 54 percent (81) of commitment beyond regulatory compliance, the suppliers reported a structured target or goal.

Nokia People & Planet Report 2018 Nokia today Our approach Connectivity Environment Integrity People Together Key data Assurance 81 4.9 Water

Water risk countries Water security risk across our manufacturing sites of tier 1 suppliers for our top 50 product sales items.

Low risk

Medium risk

High risk

Extreme risk (not in relevant countries)

No manufacturing sites in the country as per map scope

Water security risk evaluation source Verisk Maplecroft.

Nokia People & Planet Report 2018 Nokia today Our approach Connectivity Environment Integrity People Together Key data Assurance 82 5.0 Conducting our business with integrity Conducting our business with integrity

Our business is built on the foundation of trust. Our Code of Conduct expresses our personal commitment to earn this trust every day, in all of our business activities and in every country where we work. It reflects our values through clear and simple direction for all of our employees and business partners and defines the principles of ethical and compliant business practices.

Nokia People & Planet Report 2018 Nokia today Our approach Connectivity Environment Integrity People Together Key data Assurance 83 5.1 Highlights in 2018 Highlights in 2018 Internal 887 364 Human Ethical concerns Sustainability audits Rights reported through our Ethics Helpline implemented in supply chain Impact Assessment undertaken by One external assessor of the 210 World’s Most Ethical Companies Ombuds leaders as honored by the Ethisphere Institute in 75 countries in more than 150 cities in 2018 and 2019

Nokia People & Planet Report 2018 Nokia today Our approach Connectivity Environment Integrity People Together Key data Assurance 84 5.1 Ethical and responsible business

Shared responsibility Prevention of product misuse Regulatory Compliance Anti-Corruption Center Promotion of free of Excellence expression & access Ethical and to information Values & Principles Tech initiatives Code of Conduct against modern responsible slavery Open Reporting business culture Ethics and compliance Human rights Integrity is at the core of how we do business and our Code of Conduct Supply chain provides the foundation for our Data protection transparency employees and other stakeholders Breach management Limitation of conflict minerals to act responsibly. Data security Supply chain and privacy

Health & Safety Privacy principles Training & Risk mitigation Economic impact engagement

Tax payments, dividends, Indirect wages and other economic impact distributed direct economic value

Nokia People & Planet Report 2018 Nokia today Our approach Connectivity Environment Integrity People Together Key data Assurance 85 5.2 Our commitments, targets, and performance Our commitments, targets, and performance Priority area Material topic Targets Achievements 2018 Status

2018 The training was completed by 95 % of Nokia Ethical Business Training (EBT) completion: 95%. employees. Assured Achieved

2020 EBT completion: 98%. Ongoing – not on track

2030 EBT completion: 100%. Ongoing – not on track

NEW target 2020 (to replace the 2020 and 2030 targets): Ethical Business Training (EBT) completion: 95%.

Nokia People & Planet Report 2018 Nokia today Our approach Connectivity Environment Integrity People Together Key data Assurance 86 5.2 Our commitments, targets, and performance Our commitments, targets, and performance Priority area Material topic Targets Achievements 2018 Status

2019 Preparation for the GNI assessment was started in Successful completion of the first GNI assessment. late 2018 and will be completed by October 2019.

Ongoing – on track

Nokia People & Planet Report 2018 Nokia today Our approach Connectivity Environment Integrity People Together Key data Assurance 87 5.2 Our commitments, targets, and performance Our commitments, targets, and performance Priority area Material topic Targets Achievements 2018 Status

Conducting business Labor conditions / suppliers 74% suppliers achieved a satisfactory EcoVadis score with integrity 2020 and partners Comprehensive supplier sustainability risk mitigation (90% of (71% in 2017) and we conducted 75 on-site audits (72 in 2017). Assured suppliers assessed with Satisfactory Sustainability Score and 100 Ongoing – not on track on-site audits conducted per year).

Materials traceability and 2018 97% of our suppliers have achieved full visibility into conflict minerals Achieve full traceability to the smelters in our supply chain and the smelters in our supply chain. their conflict-free status (Mobile Networks). Not achieved 84% of smelters identified as part of Nokia’s supply chain were validated as conflict-free or are active in the validation process. Assured 2020 Achieve full traceability to the smelters in our supply chain and (The same percentages are valid both their conflict-free status (Nokia Group). for Mobile Networks and Nokia Group). Ongoing – on track

Nokia People & Planet Report 2018 Nokia today Our approach Connectivity Environment Integrity People Together Key data Assurance 88 5.2 Our commitments, targets, and performance Our commitments, targets, and performance Priority area Material topic Targets Achievements 2018 Status

2020 We are first focusing on getting 100% of suppliers 50% of suppliers delivering high risk activity to meet or exceed to compliant-level (score 3/5; 89% of suppliers in H&S preferred supplier status. 2018) Assured and concentrating then gradually Ongoing – on track to preferred-level (score 4/5).

2030 We have an active program ongoing, please see 100% of supplier delivering high risk activity to meet or exceed comments on 2018 and 2020 targets. H&S preferred supplier status. Ongoing – on track

Nokia People & Planet Report 2018 Nokia today Our approach Connectivity Environment Integrity People Together Key data Assurance 89 5.3 Ethical business and corporate governance

Ethical business Our long-standing reputation for include basic legal guidance and information on Five simple principles define how our acting with unyielding integrity key ethical behavior standards. Our Code promotes employees are expected to behave: and corporate personal integrity and ethical decision-making in daily • Obey laws and follow policies is our most precious asset. Our work and various business scenarios and protects our • Be fair and honest valuable reputation. • Treat each other with respect governance commitment to upholding the • Declare conflicts of interest and avoid appearance of impropriety The Code of Conduct is further enhanced by non- highest principles of business • Report any concerns promptly exhaustive summaries of the 14 key business ethics and integrity defines us as a policy statements that provide guidance on proper company and distinguishes us from ethical conduct. The 14 policy statements include: Improper Payments/Anti-Corruption, Conflict of employees and ensuring that all employees give many of our competitors. Interests, Fair Competition, Privacy, Dealing with and receive respect, irrespective of their diverse Government Officials, Intellectual Property & backgrounds and orientation. The campaign also Confidential Information, Working with Suppliers, focused on raising awareness that in line with our Throughout our more than 150-year history, we have Trade Compliance, Insider Trading, Health, Safety & values, we do not tolerate harassment of any kind, nurtured and maintained a culture of high integrity Labor Conditions, Controllership, Fair Employment including sexual harassment, in our workplace. The where every employee is held accountable and Practices, Human Rights, Environment, and campaign was jointly launched through a video responsible for upholding our ethical values and for operational guidance on third-party screening message from our CEO and Chief Legal Officer. conducting business with unwavering standards of and corporate hospitality. The complete policies integrity, embracing both values and rules. and respective Q&As are made available to our Our Compliance Policy Owner program is a critical employees. element of our overall compliance program. Each Code of Conduct of the 14 key compliance policies in our Code is We have a Code of Conduct that is applicable to all The Code underpins all conditions of labor managed by a designated functional expert, who is our employees, directors and management, as well as regulations and is supplemented and strengthened the identified subject matter expert responsible for a Code of Ethics applicable to the President and CEO, with human rights policies and procedures that monitoring that the company remains compliant Chief Financial Officer, Deputy Chief Financial Officer underscore how we aim to ensure fair employment. with laws and regulations, adapts to changing market and Corporate Controller. Our Code of Conduct Equality and respect are fundamental to our conditions and business imperatives, and incorporates sets down the key principles and practices of our company’s culture, where a diverse and inclusive evolving best practices standards into their programs ethical business approach to all daily activities and workplace provides opportunities for achievement so that all employees are aware of the policies, laws, business dealings and provides clear guidance to our and growth based on merit. We strictly prohibit any and regulations to which they must abide. employees as well as other stakeholders. form of discrimination, retaliation, or harassment, including sexual harassment. The Code is cascaded to employees via a We are committed to following and upholding mandatory Ethical Business Training that requires the laws and regulations in all countries where we In 2018, we launched a new initiative, Respect@ an acknowledgment and commitment to the Nokia operate. The high standards of our Code of Conduct Nokia, aimed at raising awareness among our Code. The 2018 Code acknowledgment requirement

Nokia People & Planet Report 2018 Nokia today Our approach Connectivity Environment Integrity People Together Key data Assurance 90 5.3 Ethical business and corporate governance

was communicated broadly via intranet resources, the Audit Committee in executive sessions without Compliance reimagined – 2018 emails, social media posts, and line manager notices. members of senior management present. Our CCO In 2018, we continued to build on the theme of The Code is accessible from various resources, reports solid line to the Chief Legal Officer (CLO), Compliance Reimagined. We executed on ambitious including a company mobile app, initially launched with dotted line reporting to the Board. goals and implemented key initiatives supporting these in 2015, to reach out to our highly mobile and goals throughout the year, including: tech-savvy workforce. The Code is available in The structure of our organization is designed • Go Local initiative, which targeted compliance at the 24 languages and publicly available in English, please to maximize the effectiveness of the program. grassroots level see our Code of Conduct. The Ethics and Compliance (E&C) organization • Compliance training sessions, policies, and processes is matrixed, with dedicated compliance leaders deployed in our Service Companies as well as in Joint We work closely with licensees to ensure adherence for each of the company’s six regions plus China, Ventures to the same standards of ethical business across which is covered by the Nokia Shanghai Bell (NSB) • Data analytics and monitoring activities incorporated all interactions and to help ensure responsible compliance team. Another compliance team is into our Third-Party Program elements to stay ahead sourcing and globally acceptable labor practices. focused on supporting Nokia’s business groups. of risks To this end, we require our licensees to follow This structure ensures that compliance risks • Comprehensive 360-degree Compliance Risk strict requirements based on our Code of Conduct, are identified and managed both horizontally Assessment, including soliciting employee feedback privacy, security, and anti-corruption policies, and vertically. In addition to the dedicated E&C through an Employee Compliance Survey human rights, trade compliance, environmental organization, our Legal Team is an integral part • Global deployment of the Nokia Compliance Controls policy as well as marketing and product quality of the compliance program and is vested with Framework (CCF) and mitigation of compliance risks requirements. the responsibility to drive compliance in their by addressing identified gaps daily operations and those of their assigned • Compliance Operating Reviews, focused on Leadership engagement, accountability client groups. identifying operating compliance risks in and compliance oversight collaboration with business teams Our unceasing commitment to integrity spans the The regional and business compliance program is • Robust compliance program deployed after a merger organization vertically from the Board of Directors, complemented through other compliance operating or an acquisition – ensuring that new employees through the leadership to employees at every level forums, such as the Compliance Operation Reviews were inducted into Nokia’s culture early in the game of the organization, and horizontally from our base (CORs) and the Disciplinary Committees where • Comprehensive and pertinent training calendar that in Finland to our far-flung operations in Asia, Africa, leaders – and not the compliance team – own and included online training seminars as well as face-to- Europe, the Middle East, and the Americas. are accountable for compliance. CORs are led by the face training sessions to raise awareness and sustain business or country head, with active participation the culture Our Chief Compliance Officer (CCO) presents from senior leaders from the finance, HR, services • Anti-corruption risks managed by our specialized separately and independently to the full Board once and procurement teams, and are a critical part Center of Excellence (CoE) with emphasis on per year, to the Audit Committee of the Board four of our strategy of leadership engagement and strengthening and streamlining policies, processes, times per year, or as needed, and to the Compliance ownership in all aspects of compliance. At each and support and Meeting attendees, which includes GLT members, level and in each forum, leadership engagement is a • Year of the How, focused on establishing compliance once per year. The CCO also regularly meets with critical part of the structure. as a strategic business partner.

Nokia People & Planet Report 2018 Nokia today Our approach Connectivity Environment Integrity People Together Key data Assurance 91 5.3 Ethical business and corporate governance

Open reporting – Global Ombuds Program Ombuds Update The Ombuds Program was launched globally in April 2017 and continued to be deployed in 2018 to further Status as of December 31, 2018 strengthen our company’s speak-up culture and reinforce our non-retaliation policy. The vast network of local ombuds leaders actively promotes the program and serves as confidential and neutral resources for employees who have compliance questions, concerns and requests for guidance. The ombuds network is a critical element in preventing, detecting and addressing wrongdoing by expanding the existing channels currently available for raising concerns.

In addition to the program rollout, the Space to Speak awareness campaign was launched globally to spread awareness on the program and the role of Ombuds Roll-Out local ombuds representatives. Completed Compliance risk assessment and mitigation Planned Evaluating ethics and compliance risk is critical to our success. As a result, we have implemented a systematic and structured approach to risk management across our business operations and processes. Key risks and opportunities are primarily identified against business targets, either in business operations or as an integral part of financial planning. These key risks and opportunities are analyzed, managed, monitored and identified as part of overall Ombuds Landscape 2018 Statistics 2019 Priorities business performance management with the support of risk management personnel. Risk management 210 Local Ombuds Leaders Based in • Overall, 750+ questions, concerns and • Global rollout continuation covers strategic, operational, financial, and hazard • 75 countries requests for guidance raised • 2019 refresh (Ombuds reaching 2-year tenure) risks and is focused on eliminating risk, as well as • 150+ cities • 72 issues reported to Ethics Helpline • Training/communications managing the key risks that would prevent Nokia • ~80% employee coverage • 25 cause found cases Ombuds Handbook from meeting its objectives. eLearning module Targeted compliance training • 2019 Integrity Week Activities

Nokia People & Planet Report 2018 Nokia today Our approach Connectivity Environment Integrity People Together Key data Assurance 92 5.3 Ethical business and corporate governance

Our risk assessment program is a dynamic process Compliance Control Framework Reviews – The Concept and the program is implemented through three independent and unique mechanisms: • Providing guidance on design and evaluation of compliance controls 1. Quarterly Enterprise Risk Management (ERM) • A means to reduce compliance risk 2. Annual company-wide compliance risk What assessment exercise to understand potential • Tool to assess compliance controls over operations compliance issues that employees may face and and other reporting objectives (anti-corruption/anti-fraud focus) to provide appropriate support to help them deal with compliance risk and 3. Country or entity-specific Compliance Controls • Anti-corruption/anti-fraud compliance embedded in Framework (CCF Reviews) – essentially an local operations Control Why internally-developed, business-owned process of Framework • Enable country organizations as First Line of Defense identifying anti-corruption risks and developing • Improve reliability of information for decision-making responsive mitigation controls.

Each of these processes provides a unique opportunity to probe more deeply into the business, • Self-Assessment How functional, country and/or entity specific risks. • Continuous Monitoring Identified risks are then addressed through a • Executive Visibility detailed mitigation plan with assigned ownership and accountability. Each item is tracked for timely completion. Each methodology complements the other and using all three vehicles, spread out at 4. Demonstrate compliance presence and oversight we introduced a new Employee Compliance Survey as different times during the year, ensures that we have in dark corners. part of our risk assessment program: a 360-degree view of our processes and are receiving • 16 questions addressing: Tone from the Top, feedback from multiple touch points. In 2018, E&C carried out 22 CCF reviews, including Compliance Program effectiveness, Improper ten country CCF reviews, two Business Group reviews Payments, Conflict of Interest, Data Protection, The CCF review is used as part of a compliance (ASN & India Global Delivery Center), eight Service Privacy, Fair Competition & Trade Compliance package and to enhance engagement, for example: Companies, and two Joint Ventures. • Delivered by an online tool and responses were 1. Round table with senior management on anonymous exceptional compliance risks faced and how to Gauging effectiveness • 19 876 employees responded and remediate them. In addition to these assessments, we continuously • Results were overall good – between 82 percent 2. Targeted face-to-face training engage with employees through anonymous surveys and 96 percent of the responses were favorable. 3. Encourage open discussion of compliance risks to gauge the effectiveness and understanding of our faced and instigate buy-in and compliance program across the workforce. In 2018,

Nokia People & Planet Report 2018 Nokia today Our approach Connectivity Environment Integrity People Together Key data Assurance 93 5.3 Ethical business and corporate governance

Findings from the Survey were integrated into Similarly, Internal Audit also attends the quarterly the 2018 Compliance Risk Assessment alongside E&C regional reviews where issues that have “Wisdom is knowing other inputs (CCF reviews, Compliance Operations been identified through audits are presented and Reviews and Internal Audit review results, Compliance discussed. Internal Audit also involves the E&C the right path to take. investigations, CCT survey results, etc.) organization when ethics-related issues are identified Integrity is taking it.” in audits. This may involve potential issues of Employee and other stakeholder inputs are actively employee fraud, third party onboarding and/or due sought to further develop the company’s program diligence, and gifts and hospitality policy. through round-table meetings with business leaders at our sites around the world, as well as inclusion Compliance training program to service companies, with over 7 800 individuals in external presentations to various stakeholder Effective and engaging compliance training for receiving face-to-face training in the 236 live training groups. This is shown through the inclusion of ethics all employees is an essential component of our sessions held across the globe. and compliance in discussions with key suppliers compliance program. We require that every employee as part of ongoing training and engagement. We completes annual training in ethical business The Ethical Business Training module is one of the use these multiple feedback channels to drive and practices, as well as other live and web-based mandatory web-based training courses that was enhance the culture of continuous improvement in targeted training, on topics such as anti-bribery, deployed in 2018. This training includes a review our compliance program. competition law, conflict of interest, and privacy. of all 14 policy areas in our Code of Conduct including: ethics in the workplace, fair competition On an annual basis, our Internal Audit team also Annual training plans are created and are based on and anti-trust, trade compliance, privacy, bribery collaborates with the compliance team in audits defined compliance topics of importance, new and/ and corruption, gifts, entertainment and hospitality, and through other inquiries that assess the or updated policies, potential risks identified, and any conflicts of interest, human rights, environment, effectiveness of our compliance processes and other key changes to law or regulations that need to equal opportunity, discrimination, and harassment. controls. This included anti-corruption risk reviews be addressed. We achieved 95 percent completion globally by the covering expense statements, petty cash, bank December 31, 2018 deadline. account access, revenue recognition, selection Course content for both live and web-based and use of supplies. The Internal Audit team training sessions is constantly assessed to ensure Compliance communications program collaborated to take steps to mitigate all risks that it incorporates best practice standards for Compliance communications are necessary to identified during these reviews. ethics and compliance training. All training includes ensure that all employees are knowledgeable about real life scenarios, knowledge checks and links and understand the laws, regulations and policies And lastly, Internal Audit is called in by the E&C to important company policies, procedures and that apply to them. In addition to formal training, organization to assist with investigations that are contacts, where applicable. we have developed a robust and comprehensive financial in nature. These requests are treated communication and awareness program to foster with high priority and other work is reprioritized In 2018, live training sessions were delivered to a culture of integrity, to enhance compliance to provide the needed resources, often altering business groups, to relevant stakeholders, to regional awareness, and to ensure adherence to the Code and the internal audit plan to address these priorities. groups, including country engagement sessions, and related policies.

Nokia People & Planet Report 2018 Nokia today Our approach Connectivity Environment Integrity People Together Key data Assurance 94 5.3 Ethical business and corporate governance

We employ two different approaches for 2018 Integrity Day communications: • Global – communications are distributed to Total number of employees who read Chief Number of Compliance Hero Recipients all employees Compliance Offi cer’s blog of November 7 • Regional – communications are customized to reflect local initiatives and requirements. 2 288 15 The Ethics & Compliance 2018 Communications (as of January 22, 2019) Plan utilized various communication vehicles to keep the messaging dynamic and interesting, including: town hall meetings, push emails, newsletters, Yammer posts, compliance blogs, a dedicated line Number of employeer who attended the Number of sites that reported on-site activites (estimated): on-site activities manager newsletter, and multimedia training. In addition, the dedicated Ethics & Compliance website consolidates essential compliance resources into 90 one central location and facilitates continuous ~7 520 90 reinforcement of the company’s commitment to compliance and integrity.

In 2018, we also designed and deployed two engaging, informational videos. Our Open Reporting • drive awareness of how integrity impacts video emphasized the importance of a speak-up employees in their everyday work Integrity Day culture and reporting concerns. The video also • promote integrity as a fundamental way of how we In 2018, we hosted a global Integrity Day event, attempted to demystify the investigations process conduct business providing a dedicated opportunity to reinforce our by explaining what happens after a concern is raised. • lead by example by providing tangible, concrete core values and commitment to doing business The Ombuds Program video reminded employees to examples of integrity in the workplace with integrity. The goal of Integrity Day is to engage utilize the growing Ombuds network, letting them • engage and enable employees to comply and align with employees globally to create awareness know that we truly want to hear the voice of our with Nokia’s core values around the Code of Conduct, reporting channels, employees, and it encouraged all employees around policies and other important compliance initiatives. the world to feel empowered and comfortable Feedback from the 2018 Integrity Week was We do this in numerous creative and interesting speaking up about compliance. exceedingly positive, with robust and global ways, reinforcing the message that business engagement of employees and senior leaders. integrity is not just a corporate responsibility, but a To support the initiative, core and customized Local events were held at 90 sites globally with an personal one for every employee. regional activities were planned that were estimated 7 500 attendees participating in person designed to: in the activities held around the globe. The Integrity

Nokia People & Planet Report 2018 Nokia today Our approach Connectivity Environment Integrity People Together Key data Assurance 95 5.3 Ethical business and corporate governance

Day event wrapped up with the announcement of Number of ethical concerns reported our 2018 Compliance Hero Award Recipients. This program, created in 2017, was designed to recognize 900 employees who uphold and exhibit exemplary 887 ethical values and behavior. In 2018 we received 29 800

nominations for the award, of which 15 employees 700 were recognized as compliance role models in one 678 or more of the following categories: Speak Up; 600 637 Challenge; Determination; Respect and Excellence. 558 500

Reporting of ethical concerns 400 without fear of retaliation It is paramount that we maintain a culture and 300 atmosphere of trust among our employees. This 200 225 ensures all employees feel comfortable in bringing concerns and potential violations of the Code of 100

Conduct to our attention, without fear of reprisals, 0 retaliation, or negative response. We clearly state in 2015 2016 2017 2018 our Code of Conduct that there is zero tolerance for retaliation related to reporting of ethical concerns. Nokia Group Comparable combined company Confidentiality is guaranteed.

We offer multiple channels to report ethical concerns, through a dedicated email address, online portal, or via dedicated country-specific phone numbers. We were substantiated with “cause found” after bribery policies, involving third parties, but neither respond to and investigate all concerns promptly and investigations. For 2018, we also implemented of these concerns was substantiated. take any necessary corrective actions. All concerns corrective actions including 24 dismissals, and are logged and tracked regularly. Our Helpline is open 16 written warnings, following these and other During 2018, we expanded our efforts to encourage for employees and external stakeholders. Our Ethics investigations. The number of concerns and employees to use the Ethics Helpline beyond Helpline allows for anonymous reporting. requests for guidance reported to the Helpline reporting concerns or potential compliance increased by 30 percent from 2017. This increase violations. The Helpline also welcomes requests for In 2018, our Ethics & Compliance Office received is largely attributable to the continued efforts by guidance on ethical dilemmas or questions regarding 887 concerns of which 248 were investigated by the compliance team to promote a culture of open the application of company policy to particular our Business Integrity Group as alleged violations reporting in the company. Specifically, two concerns situations. The result of these efforts was reflected of our Code of Conduct and 92 allegations were received as alleged violations of our anti- in the increase in the number of reports in 2018.

Nokia People & Planet Report 2018 Nokia today Our approach Connectivity Environment Integrity People Together Key data Assurance 96 5.3 Ethical business and corporate governance

Helpline Information: Email: [email protected]; NumberofinvestigationsbytheEthics&ComplianceOffice Online website: www.nokia.ethicspoint.com; Phone: www.nokiaphone.ethicspoint.com. 300

257 257 248 228 200

124 100

Number of ethical concerns reported in 2018 0 Conflict of interest 55 2015 2016 2017 2018 Controllership 74 Nokia Group Comparable combined company Dealing with government officials 0

Fair competition 9

Fair employment (all HR-related 336 concerns) Guidance 186 Number of employees dismissed on grounds of a violation of the Code of Conduct Human rights 2 100 Improper payments 13 80 Intellectual property and confidential 59 77 information 60 62 Privacy 8 47 40 Trade compliance 5 24 20 17 Wellbeing, health, safety and 24 environment 0 2015 2016 2017 2018 Working with suppliers 58

Other 58 Nokia Group Comparable combined company

Total number of concerns reported 887

Nokia People & Planet Report 2018 Nokia today Our approach Connectivity Environment Integrity People Together Key data Assurance 97 5.3 Ethical business and corporate governance

Ethical business – case examples of reported concerns

Issue raised Our guidance Actions taken Country IT Manager made purchases of phones and Nokia Code section on Controllership emphasizes that The allegations were substantiated and employee was computers without POs and for personal gain. an employee must not misrepresent financial records, terminated for cause. including falsifying expense reports.

Employee (on last day of employment) was believed to have Nokia’s confidential, proprietary, and trade secret The allegations were substantiated and Nokia took downloaded Nokia confidential and proprietary information materials are among its most valuable assets. Theft, recovery action against the individual. for non-Nokia uses. misuse or misappropriation of Nokia’s intellectual property is both a violation of company policy and – in many countries – a violation of the law.

Alleged conflict of interest between Nokia employees Nokia Code section on conflict of interests states we act The COI allegations were not substantiated; however, and subcontractor that was paid several unusual one-off in the best interests of Nokia and use Nokia property and management visibility over certain cost centers was payments. resources primarily for Nokia’s benefit. improved.

Previously blacklisted vendors secured subcontractor Nokia Code section on Working with Suppliers makes The allegations were substantiated and future supplier engagements with contractors hired by Nokia – in an clear our expectation that suppliers be qualified to contracts modified to contain a clause prohibiting attempt to circumvent the supply chain blacklist. Nokia standards, approved for use, and share the values recurrence and for compliance visibility to subcontractors expressed in our code. used by Nokia vendors.

Above are anonymized illustrative examples of investigations carried out in 2018 by our Business Integrity Group.

In 2018, there were no significant fines or non- a risk-based approach; review and approve to onboard sales third parties are entered in the online monetary sanctions for non-compliance with laws gifts, entertainment, hospitality, donations, and Third-Party Screening Tool (TPST) in accordance with and regulations related to anti-corruption, product sponsorship requests and related monitoring, and relevant procedural requirements. health or safety and security, environment, data engage in data analytics activities. privacy, export control laws or tax payments. We employ a multi-faceted approach to anti- In addition to driving awareness through training and corruption issues. We have clear and unequivocal Anti-corruption, Center of Excellence & communications, the COE employs two critical tools policies concerning improper payments, facilitation Third-Party Program to implement the company’s anti-corruption program. payments, gifts and hospitality, sponsorships and As part of our efforts to ensure continuous First, requests to pre-approve gifts, hospitality, donations, and other risk areas. We carry out training improvement, in 2017 we had launched a dedicated sponsorships and donations extended to external and regularly communicate to our employees Anti-Corruption Center of Excellence (COE). The parties are entered by employees into the online Gifts, regarding risks, and we review these risks and our mandate of the COE is to efficiently manage the Travel and Entertainment (GTE) Tool in accordance with mitigation measures with the company’s senior sales third-party onboarding processes, using relevant procedural requirements. Second, all requests leadership and Audit Committee.

Nokia People & Planet Report 2018 Nokia today Our approach Connectivity Environment Integrity People Together Key data Assurance 98 5.3 Ethical business and corporate governance

We carefully screen and monitor any commercial of mutual trust, helping them build their own prohibited from working on our behalf. This reduces third-party representatives engaged to act on our robust compliance programs and at the same the risk of corruption considerably. behalf and we demand the same high standards establishing lasting relationships that extend beyond of conduct from them. We conduct periodic audits developing business. We drive awareness of the specific requirements of and risk assessments to ensure that we identify relevant procedures and processes through global and respond to anti-corruption risks. We expect Our program is designed to ensure that we only communications and targeted trainings by delivered employees to ask questions and raise concerns engage reputable commercial third parties who by our Regional and Business Compliance Counsels, whenever they believe there is a potential law or share our unwavering commitment to ethics and not only covering our own employees, but also our policy violation, and we investigate all such concerns integrity and meet our stringent due diligence sub-contractors and customers, where necessary. in a prompt, thorough and objective manner. When standards. an investigation confirms a violation, individuals are Competition laws held accountable. We require our sales third parties to acknowledge Our competition law compliance program aims to our Commercial Third-Party Code of Conduct ensure that we meet our goal of full compliance To properly address anti-corruption related issues, (available in eight languages) during the onboarding with applicable competition laws. We compete the company has developed and implemented a process, after having gone through a thorough fiercely, but fairly. We are committed to complying global Improper Payments program that reaches all screening exercise. It relays Nokia’s expectations with competition laws everywhere we do business. of our employees, as well as our business partners. to its commercial third parties on ethical conduct The competition compliance program consists of The program is comprehensive and consists of and covers key compliance risks under the three an implementation and monitoring framework, several complimentary anti-corruption policies, main topics of: Legal and Regulatory Compliance systematic awareness raising and mechanisms for procedures, processes and guidance designed (anti-corruption, trade compliance, insider trading, incident reporting and management. Competition to prevent the offering, giving, or receiving of anti-trust, anti-money laundering); Ethical Business law compliance is integrated into our Code of improper payments, with emphasis on interactions Practices (conflict of interest, privacy, intellectual Conduct through the competition policy statement with government officials. Such payments include property, record-keeping, confidential reporting); and manifested in our group-wide Competition Law facilitation or so-called “grease” payments, improper and Environmental and Social Regulations (fair Compliance Policy. The policy statement highlights gifts, entertainment, gratuities, favors, donations or employment, environment, health and safety and some key issues for employees to keep in mind and any other improper transfer of value. human rights). watch out for in the field of competition law.

The company works closely with its third parties We also follow a strict no agents rule that prohibits Competition law compliance policy (both on the sales side and purchasing side) to the use of commercial agents in virtually all of our Competition law is covered as one important encourage adherence to the same standards of commercial dealings, other than in exceptional cases compliance area in our annual Ethical Business ethical business across all interactions and to or where required by law. We believe that every Training that is mandatory for all employees. In help ensure responsible sourcing and globally commercial partner we engage must bring tangible addition to this mandatory training, Nokia arranges acceptable labor practices. We actively engage with and material value. Agents who broker deals or other types of training sessions and awareness- our distributor partners, based on a foundation provide only consultancy services in a deal are strictly raising activities to ensure that relevant employees

Nokia People & Planet Report 2018 Nokia today Our approach Connectivity Environment Integrity People Together Key data Assurance 99 5.3 Ethical business and corporate governance

are familiar with competition rules. We arrange “As there is a growing movement and for example web-based and face-to-face training World’s Most Ethical Award awareness regarding trust and integrity exercises and refreshers for targeted employee in today’s businesses, Nokia is pleased to groups in need of deeper understanding of We were honored in early 2019 for the second applicable competition rules and potential risk areas. consecutive year, and third time overall, by the once again be recognized as one of the Ethisphere Institute as one the World’s Most Ethical World’s Most Ethical companies. It has long In 2018, targeted competition training sessions were Companies1, owed to our strong compliance been part of the Nokia way to treat every provided, for example, to our compliance leaders program, culture, and bold vision for the future. business relationship according to the and to the L&C organization. These covered many The award is given annually by Ethisphere, a leading competition areas including dealing with competitors organization for corporate ethics and compliance, to highest ethical standards.” and collaboration in tenders, procurement, and a small and select group of companies, following a implementing our global dawn raid guidelines. Our rigorous evaluation process screening the company’s Rajeev Suri, President and CEO, Nokia group-wide Competition Law e-learning, revised policies, processes, social responsibility, governance, and launched in 2016 to reflect the company and compliance culture. Having weathered reorganization, is required for all our employees to unprecedented technological change and absorbed whom competition law may be relevant in their work. companies with varying commitments to ethical practices, we have literally raised the bar for integrity The Competition Law e-learning provides employees in our field. In 2019 only four telecom companies with an overview of the basic competition rules globally were honored with this award. on dealing with competitors, suppliers and other business partners, and the abuse of dominance. 1 World’s Most Ethical Companies” and “Ethisphere” It provides some typical risk scenarios and covers names and marks are registered trademarks of different practical situations and case examples, Ethisphere LLC. thereby providing an understanding of how competition law may play into the daily work in different circumstances. Responsible advertising Advertising at our company must be built on a clear The Competition Law e-learning, the Competition and accurate messaging framework, as set out in Law Compliance Policy, along with some specific our visual and verbal guidelines, with pragmatic competition compliance guidelines and materials, as statements, grounded in fact, with real proof points, well as recorded training sessions and presentations, and reasons to believe in Nokia. The use of false or are available to our employees through the company deceptive messages, ambiguity, or aggressive sales intranet. There is a dedicated site for the competition techniques are strictly forbidden and against our compliance program under Fair Competition. Code of Conduct and our brand guidance.

Nokia People & Planet Report 2018 Nokia today Our approach Connectivity Environment Integrity People Together Key data Assurance 100 5.4 Addressing human rights

Addressing We are committed to the Our Human Rights Framework principles of the Universal Nokia employees Technology Misuse Nokia supply chain human rights Human Rights Labor rights, Health, Safety, Freedom of expression and Labor conditions, freedom of Declaration of Human Rights Impact Wellbeing, Decent working privacy expression, compensation, and the United Nations’ Global conditions, Compensation health and safety, corruption Impact - Materiality - Risk Compact, and we encourage our Impact - Materiality - Risk Impact - Materiality - Risk suppliers and business partners Potential Risk Ensuring decent Code of conduct Code of conduct for mitigation working conditions suppliers to share these values. Human rights due diligence Health and wellbeing Audits, assessments and training

Health and safety maturity We endorsed the United Nations Guiding Principles on Business and Human Rights in 2011. On balance, Grievance Ethics Helpline Ethics Helpline Ethics Helpline mechanisms we believe that connectivity and the technologies One in 90 discussions Audits and assessments we provide are a social good that can support human rights by enabling free expression, access Measurement Cultural cohesion tracker Reported and investigated Developing health and safety to information, exchange of ideas, and economic concerns Related targets Related targets development. Freedom of expression is crucial to the Related targets development of knowledge and understanding and the access to information and ideas is essential to transparency and accountability.

Our Code of Conduct and Human Rights Policy upon through the misuse of the technology we procedures to mitigate these risks. Our work with guide our human rights work and activities. The provide to our customers. our supply chain is discussed in more detail in the most direct human rights risks related to our Responsible Sourcing section of this report. company and business involve the potential misuse The ICT supply chain is multi-layered and diverse of the technology we provide, particularly where as we operate in many countries, and we recognize The table above helps readers of this People & it relates to lawful interception capabilities and the risk that our employees, partners or agents may Planet report to find information on specifically activities by governments that relate to the network take actions that contradict our Code of Conduct or mentioned human rights topics in relation to the infrastructure equipment that we design, produce that customers and suppliers may similarly violate requirements of the French duty of vigilance law. At and support for telecom operators. Our Human these principles, which could also have an adverse this time, similar regulatory discussions are ongoing Rights Due Diligence process helps ensure via our impact on our reputation, brand, or financial position. in other countries. sales interface that human rights are not infringed We therefore employ a range of processes and

Nokia People & Planet Report 2018 Nokia today Our approach Connectivity Environment Integrity People Together Key data Assurance 101 5.5 Respecting the right to privacy and freedom of expression – preventing the misuse of technology

Respecting the Technology and services will have an even greater role in our daily right to privacy lives as the world moves into what and freedom some call the Fourth Industrial of expression Revolution. – preventing 5G, IoT, Cloud, AI and other newer technologies will the misuse of enable digital lives, where billions of people and things are connected. The benefits are many – faster technology communication, access to social and economic opportunities, instant information and ideas, as well as social and environmental benefits. New technologies can make the world more inclusive.

However, we recognize that technology can be misused and as a communications technology equipment vendor, we have a responsibility to ensure our technology is not used to limit or infringe on human Our human rights due diligence necessary. Internal awareness and understanding of rights. We continue to work both in our own company We carry out rigorous Human Rights Due Diligence the potential human rights issues associated with and with the broader stakeholder community to (HRDD) investigations to mitigate potential risks the misuse of technology, as well as understanding drive the dialog on balancing the privacy rights of the posed by the misuse of our technology. The HRDD of the Human Rights policy and HRDD process is individual with the increased need for security for process is defined as a non-commercial cross- paramount to ensuring our sales teams have the both individuals and societies. For example, although functional investigative process which is used to right knowledge to flag cases early in the sales our use of AI and machine learning is principally aimed identify the potential risk of human rights violations process. Gatekeeping, checkpoints and triggers at improving network performance and maintenance through the misuse of our technology, while also for the process are reviewed and where needed efficiency, we have proactively rolled out internal attempting to identify ways to mitigate these risks improved on an ongoing basis. employee training programs that include internal to ensure compliance to our Human Rights Policy. and external expert presentations on AI in relation to Our approach provides a three-dimensional model Our experience from HRDD case reviews over the privacy, data security, and human rights issues. We also to help identify potential risk cases early in the last two years indicates a potentially rising trend have in place a Privacy by Design program across our process and trigger the required HRDD investigation in the so-called dual use of standard technology. product portfolio. and senior-level approval/denial review where When conducting risk assessments, we strive to

Nokia People & Planet Report 2018 Nokia today Our approach Connectivity Environment Integrity People Together Key data Assurance 102 5.5 Respecting the right to privacy and freedom of expression – preventing the misuse of technology

make a deliberate effort to focus on the operator related to their surveillance activities and clarity on reporting to the GNI board. We look forward to sharing or government’s ultimate use of the technology the laws and regulations governing these topics. more information in the near future. (referring to this as the “use case”). Simply We continue to actively engage with the industry, monitoring lists of individual product sales items is civil society, academia and authorities on achieving Increasing transparency not a sufficient measure to adequately assess the balance between the need for personal security and on the overall narrative intended use of the technology provided. the rights to privacy and freedom of expression as In this year’s report we have again included new fundamental human rights. anonymized case examples from our Human Rights Transparency – a must to strengthen the Due Diligence work in 2018 providing insight and overall dialog on human rights Commitment to external assessment examples on the robustness of our HRDD as well Government requests for network shutdown or In 2018 we began the preparation process for our as showing both GO and NO GO sales cases. We content blocking are received by telecom operators commitment to the Global Network Initiative (GNI) believe these real case examples support greater in many countries but are not received as such by to undergo an external Human Rights assessment. transparency and help to drive the dialogue and network equipment vendors. Our customers, many We are a member of the board of GNI group of narrative further, rather than simply reporting of whom publish transparency reports on such companies, civil society organizations such as human numbers of cases. They also serve to emphasize the requests, may on occasion come to us to implement rights and press freedom groups, investors, and importance of looking at the use case rather than a a functionality in our equipment to comply with academics working together to protect and advance simple list of products. such requests, or in rare cases the authorities may freedom of expression and privacy in the ICT sector. be looking for equipment vendors to implement specific technical capabilities or solutions for As an initial step towards the GNI assessment, in example for direct access. We state clearly our 2018 we undertook an internal Human Rights Impact position on these requests in our Human Rights Assessment (HRIA) conducted by The Business and Policy – we do not pursue business directly with Human Rights Group (The BHR Group), a consultancy intelligence agencies concerning such surveillance focused on human rights issues in the technology functionalities. Furthermore, we provide only passive sector. The BHR Group worked closely with our lawful interception capability to those customers human rights team in its preparation. The executive who have a legal obligation to provide such service as team at Nokia is the initial intended audience. The part of their license to operate – an obligation that is executive summary is available online. common worldwide for nearly all telecoms operators. This means we do not provide services or products In late 2018, we also began the planning and pre- related to post-processing, storage or analysis of assessment work for the full GNI external human interception data. rights assessment against the GNI Guiding Principles which can be found at globalnetworkinitiative.org/ Working with others in our industry, we continue to gni-principles. At the time of publishing this report call for increased transparency from governments the GNI assessment process is in the final stages of

Nokia People & Planet Report 2018 Nokia today Our approach Connectivity Environment Integrity People Together Key data Assurance 103 5.5 Respecting the right to privacy and freedom of expression – preventing the misuse of technology

Human Rights Due Diligence anonymized case examples

Country Requestor Request HRDD investigation HRDD Policy Principle decision

Case Example 1 High Risk Governmental To provide drones equipped HRDD recognized the potential vulnerability for misuse for illegitimate surveillance Nokia will provide communication systems and Country entity with cameras for a purposes of camera-mounted drones. However, it was determined that in the standard networking capabilities to governmental Governmental transport proposed project (i) the Government end-user was exclusively focused on road and customers for purposes such as public safety, authority for traffic safety traffic governance and, in particular, had no duties or authority related to intelligence GO railway communications, and smart city purposes. or law enforcement, and (ii) the cameras included in the project scope were not enablement. We will not, however, pursue business advanced enough to be well suited for surveillance (e.g. they could not be used to with intelligence agencies or similar institutions zoom in on license plates or in support of facial recognition technology). involving or relating to active surveillance. Consequently, taking account of country risks specifics, the nature of the end- users, and the technical capabilities of the equipment, the risk of the solution being misused for purposes other than legitimate traffic monitoring and road safety was determined to be very low.

Case Example 2 High Risk Governmental To provide a private 4G/LTE HRDD investigation determined that while the procuring entity and some end-users Nokia will not knowingly provide technology Country entity public safety network for of the public safety network would be domestic intelligence agencies (potentially or services for the purpose of limiting political Government use, including raising concerns given the human rights risk profile of the country), the project scope discourse, blocking legitimate forms of free speech, by law enforcement and would not include any sensitive products or items that would provide any additional GO or otherwise contributing to activities that are not intelligence agencies. or enhanced surveillance capabilities with regard to existing commercial networks in (with consistent with internationally recognized human the country. The closed network requested to be supplied would be used exclusively conditions) rights standards. by national security related agencies and units for their internal communication and would not be connected to any networks open to the public. As a condition for Nokia will provide communication systems and engaging in the project, a specific signed certification would be obtained from the standard networking capabilities to governmental procuring agency confirming the nature and purpose of the network. customers for purposes such as public safety, railway communications, and smart city enablement. We will not, however, pursue business with intelligence agencies or similar institutions involving or relating to active surveillance.

Nokia People & Planet Report 2018 Nokia today Our approach Connectivity Environment Integrity People Together Key data Assurance 104 5.5 Respecting the right to privacy and freedom of expression – preventing the misuse of technology

Human Rights Due Diligence anonymized case examples

Country Requestor Request HRDD investigation HRDD Policy Principle decision

Case Example 3 Extreme Risk A non- To provide a location-based The requested solution would enable the monitoring of the location of all Nokia will provide passive lawful interception Country governmental monitoring enhancement subscribers connected to a given cell in a mobile network. The solution would track capabilities to customers who have a legal private entity feature to be activated in the location of all subscribers within the given cell (i.e. it would not be activated by/ obligation to provide such capabilities. We will specific mobile network cells. targeted at individually selected user or device identifiers); however, it would only GO not, however, engage in any activity relating to be implemented in specific cells (and not across any full network). The solutions active surveillance technologies, such as storing or would relay the required information to the standard 3GPP interfaces, and would analyzing of intercepted data. not involve any features related to storing, analyzing, or post-collection processing of the information. Such a solution could be used, for example, to enable quick responses to unforeseen safety incidents in locations such as airports in situations where ID-based targeted tracking would not be possible within the required time to prevent serious injury to people or damage to property.

HRDD further determined that the feature was a mandatory requirement for mobile operators in the relevant country. Furthermore, since the solution would be limited to selected cells, it would not enable indiscriminate mass surveillance or other large-scale monitoring activity. Conversely, the use case for specific safety sensitive locations such as airports was justified and could be effectively implemented through the requested solution.

Case Example 4 High Risk Local telco The request was twofold with GO Nokia will provide passive lawful interception Country operator the aim of providing end-to- (passive capabilities as a feature of Nokia end lawful intercept via two standard telecommunications products to customers who independent solutions. lawful have a legal obligation to provide such capabilities. intercept) We will not, however, engage in any activity relating 1 Standard passive 3GPP/ETSI 1 Nokia does provide standard passive 3GPP/ETSI compliant lawful intercept to active surveillance technologies, such as storing compliant lawful intercept capability to customers who have a legal obligation to provide such a service. This or analyzing of intercepted data. capabilities for fixed and part of the request is acceptable and within our Human Rights Policy. mobile networks in the Nokia will seek to prevent the sale of our products telco network and services in cases where we believe there is a NO GO significant potential that those products or services 2 Active monitoring centre for 2 The second part of this request included a monitoring center for the Law (active could be used to infringe human rights. Law Enforcement agency Enforcement agency. Given that Nokia does not, by way of policy, sell monitoring monitoring centers, nor any support or facilitation related to the implementation of center) monitoring centers (regardless of location or country), the request to supply a monitoring center was immediately declined

Nokia People & Planet Report 2018 Nokia today Our approach Connectivity Environment Integrity People Together Key data Assurance 105 5.6 Responsible sourcing

Responsible The integrity of our supply chain is Our supply chain in a nutshell a critical but complex component sourcing of our own reputation and we work hard to collaborate with both customers and suppliers to drive transparency, sustainability and good ethical and business practice in the supply chain.

We put in place and communicate the processes, The majority of our manufacturing suppliers are We expect our suppliers to ensure they have in place requirements, programs, procedures and policies based in Asia, whereas our services suppliers are the necessary management systems, resourcing, to mitigate supply chain risks wherever possible. located around the world. and a code of conduct that in practice show their We work with our suppliers to remedy, develop commitment to good labor practices and working and build capability to enable a more sustainable In 2018, we had business with approximately 14 000 conditions, respect for human rights, and good and transparent ecosystem. We engage with our suppliers, 80 percent of our total supplier spend was ethical business conduct. We further expect and customers to drive improvements and share distributed across approximately 450 suppliers. Our encourage our tier 1 suppliers to apply and cascade knowledge and experience. final assembly included our own factories in Finland, the same standards to their own suppliers. Our India and Poland as well as Flextronics, Foxconn, Jabil company purchasing procedures are strictly applied We have three broad categories of suppliers: and Sanmina supplier sites. in our relationships with existing suppliers and 1. Hardware suppliers which cover the materials whenever we engage with potential new suppliers. that go into our products Our Supplier Requirements are communicated to our Transparency and compliance requirements are 2. Services suppliers which we offer to customers suppliers as part of our supplier contracts, and we firmly applied to all supplier relationships, and gifts such as network planning, installation and expect our suppliers to commit to these as part of or entertainment are neither given nor received maintenance and construction of the networks their contractual obligations. An overview of those beyond nominal value items. We investigate and we supply and requirements can be found on our website. The qualify all suppliers according to our standards 3. Indirect suppliers which provide the goods and requirements cover social, ethical and environmental and practices, requiring them to comply with all services we buy to conduct our business, (IT issues. In addition, we have detailed appendices applicable laws and regulations, and show they share hardware and software, logistics, consulting, covering environmental requirements including Nokia the values stated in our Code of Conduct. financial, legal, marketing and so on. Substance List applicable for hardware suppliers and health and safety for services suppliers.

Nokia People & Planet Report 2018 Nokia today Our approach Connectivity Environment Integrity People Together Key data Assurance 106 5.6 Responsible sourcing Brief overview of supplier base management and corporate responsibility (CR) Brief overview of supplier base management and corporate responsibility (CR)

Nokia Code of Conduct

Nokia Code of Conduct Contractual Agreement main clauses + Request for Information (RFI) Nokia Supplier Requirements Contractual Agreement main clauses + & Environmental appendix •Request HSE and CR for elements Information (RFI) Nokia Supplier Requirements • Anticorruption Due-Diligence • HSE and CR elements & Environmental appendix • Anticorruption Due-Diligence Introduction to Nokia Standards IntroductionSuch as work at height, to Nokia road safety, Standards electrical Supplier Supplier selection qualification & contracting Such as work at height, road safety, electrical Supplier Supplier selection qualification & contracting

Supplier management Category Strategies & Supplier performance requirements management Category Strategies & H&S Consequence For preferred, allowed, restricted suppliers Management performance requirements H&S Consequence For preferred, allowed, restricted suppliers Management Monitoring Compliance Improvement and • EcoVadis: preferred and allowed suppliers Capability Building Monitoring Compliance Improvement and • CDP Climate change: energy intense suppliers (TOP 500) • CDPEcoVadis: Water preferred security: andwater allowed intense suppliers suppliers (TOP 150) •Capability Improvement Building plans (CAPS) • Webinars • HealthCDP Climate & Safety change: maturity energy assessment: intense suppliers all suppliers (TOP with 500) high risk activities. Includes also Supplier Performance environmental assessment. • OnsiteImprovement workshops plans in (CAPS) high risk • CDP Water security: water intense suppliers (TOP 150) • Responsible/Confl ict minerals: all 3TG suppliers, spend above 500K • countriesWebinars Evaluation (SPE) Supplier Risk Profi ling • Health & Safety maturity assessment: all suppliers with high risk activities. Includes also Supplier Performance • On-siteenvironmental CR audits: assessment. based on country, industry, type of activity, stakeholder concern, • GuidanceOnsite workshops materials in high risk Aff ect supplier strategic status Country, industry & type of activity, • Responsible/Conflresults of desktop monitoring.ict minerals: all 3TG suppliers, spend above 500K • Nokiacountries Learning Academy orEvaluation phase-out (SPE) businessSupplier volume Risk Profi ling • Guidance materials • On-site CR audits: based on country, industry, type of activity, stakeholder concern, Aff ect supplier strategic status Country, industry & type of activity, results of desktop monitoring. • Nokia Learning Academy or phase-out business volume

Nokia People & Planet Report 2018 Nokia today Our approach Connectivity Environment Integrity People Together Key data Assurance 107 5.6 Responsible sourcing

Key figures of our supplier onsite audit program related to sustainability

Audit type Corporate Responsibility audit Supplier Requirements audit Supplier H&S maturity assessment Conflict Minerals audit Content Human and labour rights, health and safety, CR elements covered as part of entire Health & safety elements Conflict minerals scoping, due diligence and risk environment NSR sets of elements management

Targeted suppliers All All High risk services Production (hardware)

Typical duration 1–2 days 1–2 days, CR few hours 3–4 hours onsite 1 day

Number of audits in 2017 72 47 900+ (cumulative) 10

Number of audits in 2018 75 38 ~1 400 (cumulative) 10

Global supply chain related risks are identified as Overview on types of suppliers addressed through Monitoring, assessment and auditing part of our materiality analysis and Enterprise Risk our CR programs We run assessments with our supplier network Management. We also carry out more in-depth • Over 99 percent of relevant supplier base is regularly to support them in meeting our ethical analyses to determine all risks related to supplier covered by Supplier Health and Safety Maturity standards and improving performance where activities. We take the outcome of these analyses Assessment. necessary. We monitor our suppliers through a and include them in our category strategies, noting • Over 46 percent of supplier spend is covered by variety of methods, of which the most important are: the nature, magnitude, and monitoring as well as CDP supply chain climate change program. performance requirements for these risks. Our • 98 percent of relevant supplier spend is covered Our Nokia supplier requirements audits procurement teams revisit our category strategies by Conflict Minerals program. annually. Our risk approach also takes into account • 58 percent of supplier spend is covered by Our general audit covers the full set of supplier the location of the supplier and the business EcoVadis sustainability assessments. requirements, and of which corporate responsibility context. We have both detailed KPIs and public • 100 percent of supplier spend is covered by the requirements are a subset. We commonly use this global targets directly related to our supply chain Request for Information (RFI process, related to type of audit with new high-risk suppliers or when a activities. Suppliers and other externals also have anti-corruption due diligence, health and safety, supplier has seen a significant change in its business the opportunity to raise any concerns through and overall sustainability. situation such as country location change. our Ethics Helpline. In 2018, out of the total 887 concerns raised via the Helpline, 58 cases related to For on-site audits we do not measure the percentage working with suppliers (40 in 2017). 24 percent of as audits are risk-based. these cases were reported by third party vendors. Read more on raising concerns on page 90 under the Ethics and Compliance.

Nokia People & Planet Report 2018 Nokia today Our approach Connectivity Environment Integrity People Together Key data Assurance 108 5.6 Responsible sourcing

Labor conditions and environmental Findings from our in-depth audits management - in-depth audits Category Instances of Number of Total number of We conduct specific corporate responsibility in- of Findings non- potential risk recommendations for depth audits on our existing suppliers and align compliance areas identified improvement with SA8000 methodology in audit implementation. Child labor (proof of age documents missing) 3 0 3 The audits include not only document reviews, interviews with managers and employees, and site Forced labor (contract agreement issues/fine/ 4 3 7 visits, but also inspections of facilities, production deduction etc.) lines, and warehouses. Health & safety 378 178 556

Freedom of association and right to collective 2 1 3 In addition, we continue to use EcoVadis bargaining sustainability assessments to review the environmental, labor, health, safety, ethics, and Discrimination 6 1 7 sustainable procurement management systems of Disciplinary practices 10 1 11 our suppliers through a tailored questionnaire and Working hours 51 11 62 supporting document reviews. We require suppliers to achieve at minimum a satisfactory score on Remuneration 54 22 76 EcoVadis and follow up with suppliers whose score is Management systems 180 125 305 below satisfactory. Environmental management system 76 23 99

In 2018, we had 74 percent (71 percent in 2017) Total 764 365 1129 of suppliers on EcoVadis with a satisfactory performance score. We request that EcoVadis The table is based on 75 CR in-depth audits conducted in 2018. scorecards are renewed every 2 years.

In 2018, we implemented 364 (393 in 2017) supply Colombia, India, Malaysia, Mali, Mexico, Myanmar, audits, seven of the audits were conducted through chain audits which included 75 on-site audits on Peru, the Philippines, Senegal and Togo and reached our customers’ Joint Audit Cooperation (JAC) corporate responsibility topics; 38 were on-site audits a total of around 49 000 supplier employees. framework. against our full set of supplier requirements and 251 suppliers were assessed using the EcoVadis scorecards. We found 764 instances of non-compliance of which Audit closure is a continuous challenge – our target 378 related to health and safety, 76 related to is to close CR onsite audit findings within six months In 2018, we spent 190 auditor days conducting environment. Based on the findings, we made 1 129 of the audit. In 2018, timely closure of audits stood corporate responsibility in-depth audits (187 in recommendations for improvement, and these are at 52 percent. We realize this must be improved 2017) at 75 supplier sites (72 in 2017). Countries being addressed through corrective action plans. See and will make increased efforts to achieve a higher covered by these audits were: Cameroon, China, examples on the following page. As part of the 75 percentage closure going forward.

Nokia People & Planet Report 2018 Nokia today Our approach Connectivity Environment Integrity People Together Key data Assurance 109 5.6 Responsible sourcing

Examples of identified non-compliance and actions taken

Category Non-compliance identified Actions taken by supplier Forced Labor The proportional payment of the cost of the course / seminar / training This finding on forced labor is in the process of closing with Nokia’s is made in case of labor resignation within the following six months recommendation that paying back of the training course by the from the training. employees shall be stopped/not practiced in cases where the training is a necessity for executing the job a person is assigned to.

Remuneration Workmen’s compensation benefit is not in place. The workmen compensation benefit was issued to employees.

Health & Safety Health & Safety Hazard Identification and Risk Assessment is not done Health and Safety Hazard Identification and Risk Assessment were yet. completed throughout the business units. Control measures have been put in place.

Working hours Excessive overtime work observed for employees and there is no Working time ensured on a monthly basis jointly with Nokia though evidence of compensating the overtime work performed. proper recording with assigned responsible person for the same so that the working time should not be exceeding the total manhours as per statutory requirement. Arrangements were done to change in shift timings where necessary. Additionally: 1. Supplier has plan to approach Nokia to share the projection for 15 days in advance to ramp up shift roster and train people to handle additional work volumes and reduce overtime hours. 2. Supplier has established a policy of no overtime work and the relevant employees, staff and supervisors were communicated and trained on the requirements related to overtime work.

Management systems Employment contracts were not complete (including e.g. amount of Update was done to current procedure indicating that all regular working hours and total wage and benefits) for all sampled employees. employees should have an employment agreement indicating Former contract workers who were changed to regular employees had working hours/salary/NDA for client/supplier and customers and just a “notice of change on employment status”. Also employees with with a signature on all pages. long working history in the company had very generic clauses in their contracts. Contracts were also not signed on all pages.

Environmental management system There is no environmental impacts and aspects analysis conducted Supplier started a program of identification of the environmental yet. Inventory of the waste is not maintained. There is no improvement aspects and measurement of environmental impacts such as waste program for the identified environmental aspects such not targets set and energy usage to start a PDCA improvement cycle on these. for waste reduction and reduction for the usage of energy.

This table is based on 75 CR indepth audits conducted in 2018.

Nokia People & Planet Report 2018 Nokia today Our approach Connectivity Environment Integrity People Together Key data Assurance 110 5.6 Responsible sourcing

Capability building – driving improvements Supplier participation in Nokia sustainability workshops and webinars Additionally, we ran 11 training workshops for suppliers operating in high-risk countries such as 700 Cameroon, China, Colombia, India, Malaysia, Mali, 600 606 549 Myanmar, Mexico, Peru, Senegal, and Togo. In 500 2018, we organized online trainings on conflict-free 400 389 sourcing and climate change, and we arranged face- 393 300 to-face training workshops establishing improvement 238 253 200 208 plans and actions for 393 suppliers. Please refer 159 to the diagram: Supplier participation in Nokia 100 sustainability workshops and webinars. 0 2015 2016 2017 2018 Climate impacts – helping suppliers reduce and report Number of participating management-level supplier employees Number of participating supplier companies All our suppliers, except those with very low environmental impact, are required to have a documented Environmental Management System Supplierclimatedisclosurefigures (EMS) in place. For key suppliers and for those with greater impacts, we require certification to ISO 14001, which we track through our audits 314 129 143 and assessments. Suppliers disclosed data, Suppliers purchased renewable Suppliers engaged their own >50% of Nokia spend energy suppliers We jointly create environmental improvement programs in order to improve our upstream Scope 3 emissions reporting through the CDP Supply Chain 247 211 63 Program (overall Scope 3 equals all indirect emissions that occur in our value chain, including upstream Suppliers reported GHG Suppliers reported reduction (178 Highlighted collaborative and downstream). We encourage our key suppliers emissions (Scope 1/2) thanks to us) and have active opportunities with us targets for emission reduction to report their climate impacts and set carbon reduction targets through CDP and work with them to build improvement programs. Total 15 million Total EUR 637 In 2018, 314 of our key suppliers, an increase of CO2e tCO2e € million 22 from 2017, representing 46 percent of our reduction saved total procurement spend, responded to the CDPs

Nokia People & Planet Report 2018 Nokia today Our approach Connectivity Environment Integrity People Together Key data Assurance 111 5.6 Responsible sourcing

request to disclose their climate performance Developing Health & Safety Maturity While strengthening learning and capability building information. Of these 247 disclosed their carbon We carefully track working conditions as a key around our health and safety requirements, we also emissions (an increase of 33 from 2017) and component of our sustainability approach to our made it clear that failure to have controls in place 187 also provided emission reduction targets (an supply chain. We place special emphasis on health will result in business consequences. As part of increase of 34 from 2017). The total saving from and safety as our supply chain includes equipment consequence management for 44 supplier related these carbon reduction initiatives was 14.6 million installation and maintenance contractors who spend fatal, critical or high potential incidents that occurred metric tons CO2e and around USD 726.3 million much of their time working at height, in confined during 2018, we issued 29 warning notes to our during the course of the year. spaces, and driving long distances. Armed with the suppliers and terminated business relationships with necessary training, we endeavor to ensure these 2 suppliers. Of the total 31 cases 84 percent were It should also be noted that 143 suppliers engaged contractors are aware of the potential dangers “high potential” where no one was critically or fatally their next tier in CO2 reporting. In addition, 118 of associated with their work and have and use the injured. The consequence management committee our suppliers calculated a Nokia allocation of their appropriate safety equipment. We also augment does not issue cards based on severity but rather emissions based on the products and services we our health and safety guidance with standards considers the control the supplier has in place when purchase from them and 88 suppliers provided concerning road safety, work at height and working deciding on the consequence. emissions intensity data. Using a hybrid methodology with electricity, which is further covered in our for calculation, based on supplier information supplier workshops. for Scope 1 and 2 emissions, our emissions with participating suppliers totaled 2.1 million metric At the end of 2018, of those suppliers who provide tons of CO2e. By scaling up the allocated emissions us with high risk activities, (working at height, to 100 percent of our suppliers, we estimated our transportation, and electrical work), 100 percent scope 3 emissions from our supply chain to be were covered by our health and safety maturity approximately 5.3 million metric tons of CO2e. assessments (on-site evaluations conducted by our regional health and safety professionals). 89 percent Water – resource management (an increase of 8 percent from 2017) of assessed 2018 was the first year of active engagement with suppliers met H&S compliant supplier status. Those our suppliers on the efficient use of water. We have not meeting the requirement were recommended identified supplier categories where water may be for phase-out or for thorough improvement where a material risk and have begun to address these we had no alternative choice. For example, in some suppliers with a water assessment program. 150 of developing countries we do not have suppliers our suppliers have already disclosed their water data. capable of meeting our requirements, and we need More information on our activities concerning water to work hard to help them improve while putting management can be found in the water section of the strong supervision in place. Protecting the Environment chapter on pages 80–82.

Nokia People & Planet Report 2018 Nokia today Our approach Connectivity Environment Integrity People Together Key data Assurance 112 5.7 Combatting modern slavery in the supply chain

Combatting We do not tolerate slavery, Corporate responsibility risk map of our suppliers servitude, trafficking in persons, (including modern slavery, labor, health and safety and environmental risks) modern slavery and forced or compulsory labor in the supply in our own operations or in our chain supply chain.

In 2018 we published our second Modern Slavery This activity statement, with an updated risk map. The statement can be found on our corporate website at supports SDG www.nokia.com/about-us/sustainability/downloads. Target 8.7: “Take immediate and effective Dealing with early warning signs measures to eradicate forced labor, end modern slavery and In 2018, as a result of our audits we encountered human trafficking and secure the seven cases where we saw potential risk of forced prohibition and elimination of labor and therefore classified it accordingly. Two of the worst forms of child labor, including recruitment and use of the cases were related to an obligation on employees child soldiers, and by 2025 end to pay back course fees if they were to leave the child labor in all its forms” company within six months after the training, which Low risk could place the employee at risk of being kept in a situation resulting in being forced to continue Medium risk working as a result of not having the money to pay High risk back the training fee. In another instance found in Locations of corporate responsibility on-site audits and India, the supplier had not provided employees with workshops we conducted in 2018. Modern slavery was one Extreme risk appointment letters detailing relevant terms and element among other sustainability topics. conditions of employment. In another three cases, No signifi cant areas of operation the percentage of dispatched workers exceeded the allowed 10 percent limit. And the last case was This map is an aggregate of a selection of Verisk Maplecroft indices. The map covers countries where we have business with suppliers related to missing policy on forced labor. (exceeding a set minimum € threshold), but may not cover all countries where our suppliers operate. This was created based on Verisk .Maplecroft’s Global Risks Portfolio

Nokia People & Planet Report 2018 Nokia today Our approach Connectivity Environment Integrity People Together Key data Assurance 113 5.7 Combatting modern slavery in the supply chain

These cases have been addressed with the suppliers expect our suppliers to uphold that right, without effort to further support the eradication of forced as part of audit follow-up and the learnings have obstruction or discouragement. Where there may labor and human trafficking. The company members been shared with all of the suppliers at the supplier be legal restrictions in place, we find alternative of Tech Against Trafficking believe that technology workshops in each location. means to enable both individuals and groups to raise can and must play a major role in preventing and concerns to management. As a rule, our corporate disrupting human trafficking and empowering Child labor – zero tolerance responsibility audits include a review of freedom survivors. In 2018, the group began working with We have a strict policy against the use of child of association as one component of employee- anti-trafficking experts to identify and investigate labor and we continuously work closely with our management communications. opportunities to develop and scale promising suppliers to scrutinize, monitor, and remediate technologies. any and all potential risks. We have strict ethical In 2018, we again noted potential risks of non- and human resources policies which have been conformities as part of onsite audits related to The group embarked on an ambitious project to designed to ensure that no one below the legal employee - management communication. These understand and map the landscape of existing working age is hired in our business. If a child labor included such examples as missing anonymous technology tools being used in the anti-trafficking risk is identified, we immediately put in place a feedback and complaint channels or records of sector. Over 200 anti-trafficking tools were identified, Child Labor Remediation Plan in line with SA8000 worker union representative elections. with the majority (approximately 69 percent) working recommendations. In 2018, we encountered 3 to identify existing victims of human trafficking and findings at one of our audits related to a young The role of ICT in tackling modern slavery address and manage the risk of child and forced worker who was working in a hazardous area In June 2018, we published our second Modern labor in corporate supply chains. The initiative (dust) and exposed to overtime. The factory also Slavery statement, with updated information. We intends to publish an interactive map of technology did not have the required registration approval continued our collaborative work to investigate ways tools currently used to combat trafficking across the for employment of young workers from the local in which the technology we provide can be used to globe with the goal of increasing collaboration and labor bureau. eradicate modern slavery. We realize the potential encouraging the use of innovative technology. For risks of traffickers and other criminal groups and more information visit BSR website. We further reiterated zero tolerance on the subject at individuals using technology to conduct their criminal all audits and workshops with suppliers, strengthening activities. We also realize that only by working with During 2018, we continued to advocate for greater the message on requirements to map the related risks other key stakeholders can we drive greater impact dialog on the issue of modern slavery and human and develop child labor mitigation and remediation and encourage concrete solutions to tackling issues rights across industry and civil society, participating plans for direct and indirect forms of child labor, as related to modern slavery on the fight against in a number of events in London and elsewhere in well as special protection required for young people trafficking, forced labor or modern slavery. Europe and the US. and student labor if they are employed. In June 2018, as co-founders with BT and Microsoft, Freedom of association and we announced the formation and goals of the Tech collective bargaining Against Trafficking initiative. This coalition of global All employees have the right to form or join their own technology companies, civil society organizations, organizations and conduct collective bargaining. We and the UN have come together in a collaborative

Nokia People & Planet Report 2018 Nokia today Our approach Connectivity Environment Integrity People Together Key data Assurance 114 5.8 Materials traceability and conflict minerals

A key area of our work with our Shareofsupplierswhohavecompletedidentificationofallsmelters Materials andhaveachievedconflict-freestatus traceability and supply chain is the ongoing potential risks identified in the 100%

95% 94% 95% conflict minerals mining, extraction and trade of 95% 93% 93%

metals that provide key minerals in 90% 88% 86% 84% electronic components. 85%

80%

Risks include military conflict, human and labor 75% rights violations and damaging impacts on the Tantalum Tin Gold Tungsten environment. Suppliers who have completed identifi cation of all smelters

It is therefore paramount that we are able to trace Suppliers who have achieved confl ict-free status the materials used in our products and ensure they are conflict-free. We recognize that there are many complex issues associated with conflict minerals*, but through our work in this area we aim to contribute to a long-term solution that ensures responsible and As part of our work to ensure conflict-free minerals held two workshops on conflict minerals and cobalt conflict-free sourcing via legitimate trade that brings we collaborate with our industry peers through sourcing in China, perhaps our most challenging sustainable improvements in those countries where the Responsible Minerals Initiative to improve the market in this area. Ten audits covering conflict the risks are greatest. We demand that our suppliers traceability of minerals and ensure responsible minerals due diligence were also carried out in China commit to sourcing these key materials from sourcing. Our due diligence approach is aligned with during 2018. environmentally and socially responsible sources. We the OECD Due Diligence Guidance for Responsible require our suppliers to show their commitment to Supply Chains of Minerals. In 2018 as part of our ongoing work with the only sourcing these materials, that either directly or Responsible Minerals Assurance Program (RMAP) to indirectly contribute to conflict, from environmentally In 2018, we again underscored the need for our identify and validate the smelters and refineries in and socially responsible sources. suppliers to establish full traceability of smelters in our supply chain that are conflict-free or active in our supply chain and achieved a 97 percent rate of the validation process, we achieved an 84 percent suppliers meeting our requirement. Where a supplier validation level. A further 5 percent of smelters * Columbite-tantalite (coltan) (or its derivative tantalum), did not meet our objective or had no corrective were identified where our due diligence efforts have cassiterite (or its derivative tin), gold and wolframite (or its action plan in place, we recommended phasing demonstrated that the smelters can be reasonably derivative tungsten). out this supplier from our supplier pool. We again considered as conflict-free, for example, due to

Nokia People & Planet Report 2018 Nokia today Our approach Connectivity Environment Integrity People Together Key data Assurance 115 5.8 Materials traceability and conflict minerals

sourcing from recycled sources or from outside of the conflict affected areas.

We have continued our work with the Public-Private Alliance, further contributing to the development of in-region programs. In 2018, we also conducted mapping of cobalt in our components based on part material declarations. We addressed 48 relevant suppliers about Nokia requirements related to Cobalt and engaged them in exercising due diligence over cobalt supply chain by using the industry's Cobalt Reporting Template. Cobalt was also included in the scope of our workshops in China. We will continue cobalt-related due diligence in 2019. For more information on our due diligence results, please refer to our conflict minerals report available at the end of May 2019.

In 2018 we also engaged with our procurement category streams by setting minimum expectations for performance level of Preferred and Allowed status suppliers documented in procurement category strategies. The performance of suppliers across our sustainability monitoring programs such as onsite audits, CDP, EcoVadis, Supplier Health and Safety Maturity Assessment as well as Conflict Minerals program contribute to our sustainability pillar which is one of the six pillars of our Supplier Performance Evaluation.

Nokia People & Planet Report 2018 Nokia today Our approach Connectivity Environment Integrity People Together Key data Assurance 116 5.9 Data privacy and security

Data privacy How companies protect customer, Our ongoing key programs to identify and protect For more information on the solutions we provide to employee, or other sensitive data is critical data include: our customers visit networks.nokia.com/solutions/ and security • critical information protection program security. one of the most significant issues • focused assessments • nokia privacy program Our breach management process is followed in the facing our industry today, and its • supply chain security program event of a breach or attack. The plan focuses on importance grows ever greater as • customer security requirements program three key elements: • common security controls program 1. detection and analysis we see the implementation of 5G, • selected ISO 27001 certifications 2. containment, eradication, and recovery IoT and AI, with everything and 3. post incident activities People-related mitigation relies on active security everyone connected. culture management, enabling and supporting We run a response function that consists of three employee security work, and employment life cycle teams – Incident Response Teams (IRTs), the Major management. To drive this, we have an internal Event Team (MET) and the Crisis Management Team We have dedicated processes firmly in place to accreditation program with three tiers. Approximately (CMT) – depending on the type of incident or crisis. address this, focusing on technical protection, 30 000 of our employees have already completed Each team has well defined tasks, and teams carry processes, and people. it. Our security culture program also provides out training on an annual basis. Teams consist other learning channels such us regular company- of subject matter experts from all areas of the Technical protection includes, for example, security wide phishing testing, mandatory e-learning for company. Regular training and internal and external incident event monitoring (SIEM) by our security all employees and targeted campaigns. Our top testing on our breach management capability is operations center (SOC), access management, management tracks how many personal learning provided. The testing includes annual internal table- anti-malware operations, certificate management, moments (engagements) our people on average have top exercises, as well as annual external outside-in log provisioning, network security services, security throughout the year. This includes in addition to our simulated attacks. incident management, server provisioning, software security accreditation program, phishing testing and whitelisting and vulnerability remediation. e-learning other activities like participation to our As is the case for all international companies roadshows, targeted briefings, breach management with internet-facing services, we face daily attack Process-related controls include business-driven trainings and exercises, and other related attempts. We actively and regularly validate our governance, security as part of global business presentations. security throughout the year through: processes, integrated enterprise risk management, • external and internal security audits active third-party management and a dedicated Our market research reveals that security is an ever- • group-wide external maturity assessment security program to respond to our customers’ growing concern within the telecommunications • external and internal simulated attacks (red team security and privacy requirements. Our internal industry. We are firmly dedicated to protecting next- tests) processes help to enforce the proper handling, generation networks from attacks and are seen as a • regular group wide phishing testing storage, transmission, and destruction of sensitive or leader in the provision of network security solutions. • external information security risk rating service confidential information. We hold annual Security Days and Nokia HackAthons. • customer feedback

Nokia People & Planet Report 2018 Nokia today Our approach Connectivity Environment Integrity People Together Key data Assurance 117 5.9 Data privacy and security

• external and internal ISO 27001 audits for our Our privacy management model Global Delivery Centers

All our employees and external contractors are Policies and their required to take mandatory Information Security eff ective implementation e-learning courses every two years. New hires must take an e-learning course when starting with Nokia and our security awareness and culture Key Performance Indicators (KPIs) are tracked on a Executive oversight Training, awareness, monthly level. and sponsorship and behavioral change

In 2018, we achieved our target to secure our defined critical information ecosystems and closed 95 percent of the identified critical and high vulnerabilities identified in our assessments and Monitoring, assurance, audits. We are well on track to achieve our 2020 Risk assessment, tracking, and mitigation and compliance target to be recognized as an industry leader in auditing security and privacy.

Getting privacy right Procedures for managing With the growing complexities provided by today’s and responding to technology and business environment, it is inquiries, complaints, and imperative that we lead and enable strategic and privacy breaches consistent management of privacy related risks, as well as ensuring we are in a position to make the most of all the opportunities ahead. With the arrival of 5G and IoT, in a world where everyone and everything are increasingly connected, cloud storage, central functions level policies and processes. Our We then implement appropriate controls to ensure big data, and other technology advances, getting objective is to mitigate privacy risk in relation to that all personal data is only accessed by persons privacy right is not only desirable – it is a necessity. the data we collect, process and store. Essential with a clear and justifiable need to know. Should to this approach is observing the concept of data a personal data breach occur, we have a formal We have established a comprehensive company-wide minimization, meaning we endeavor only to collect process in place to manage and mitigate any related privacy program that is based on relevant laws, best personal data that is necessary for the purpose for risk to data subjects. These processes also include practices and standards. This program is supported which they are collected and to retain such data for mechanisms to communicate with supervisory by and aligned with corporate, business group and no longer than necessary. authorities, should that be required. To drive and

Nokia People & Planet Report 2018 Nokia today Our approach Connectivity Environment Integrity People Together Key data Assurance 118 5.9 Data privacy and security

maintain privacy awareness, we have designed and delivered a program of awareness training targeting high-risk groups as well as all Nokia employees through a mandatory e-learning module. Employee responsibilities towards privacy are also covered in our Code of Conduct.

Our privacy management model is set out in our Group-wide Privacy Management Policy and supported by Nokia Executive Leadership. The model provides clear privacy principles and a governance framework to implement sound privacy related practices across our businesses. We continue to strengthen our framework with supporting policy and procedures. Thanks to our programmatic approach, we remain in a position of strength to safeguard personal data entrusted to us. During 2018, we updated our privacy processes in readiness for the GDPR (General Data Protection Regulation) ensuring they remain fit for purpose. We also rolled out mandatory privacy awareness training for all employees reminding everyone of the importance of protecting data and how they each have a part to play in relation to that objective.

Compliance with the new General Data Protection Regulation (GDPR) and other privacy laws as well as commitments to customers, are enforced via our Privacy Principles and Requirements.

There were no substantiated complaints regarding breaches of customer data in 2018.

Nokia People & Planet Report 2018 Nokia today Our approach Connectivity Environment Integrity People Together Key data Assurance 119 6.0 Respecting our people in everything we do Respecting our people in everything we do

Our people are our greatest asset and we aim to build a culture of trust, respect, diversity and opportunity for all.

Nokia People & Planet Report 2018 Nokia today Our approach Connectivity Environment Integrity People Together Key data Assurance 120 6.1 Highlights in 2018 Highlights in 2018

Over 166 900 different nationalities leaders and employees 99 worked in Nokia were trained on gender balance topics

Pledged our support for LGBT+ 2.2 % people worldwide by signing the UN Standards million training hours of employees of Conduct for Business to our employees completed their annual performance evaluation

Nokia People & Planet Report 2018 Nokia today Our approach Connectivity Environment Integrity People Together Key data Assurance 121 6.1 Respecting our people

Nokia values Cultural cohesion Respecting Employee engagement our people Health & wellbeing Personal development High performance and high Open reporting Continuous learning integrity underpin our culture Safety Rules Coaching and mentoring supported by our vision, brand, Engagement Reward and recognition and values. Health and safety Development

Culture

Inclusion Diversity Fair employment Everyone’s equal Code of conduct opportunities to grow Labor rights Gender balance Support in restructuring Girls in STEM

Nokia People & Planet Report 2018 Nokia today Our approach Connectivity Environment Integrity People Together Key data Assurance 122 6.2 Our commitments, targets, and performance Our commitments, targets, and performance Priority area Material topic Targets Achievements 2018 Status

Nokia People & Planet Report 2018 Nokia today Our approach Connectivity Environment Integrity People Together Key data Assurance 123 6.2 Our commitments, targets, and performance Our commitments, targets, and performance Priority area Material topic Targets Achievements 2018 Status

Ongoing – not on track

Nokia People & Planet Report 2018 Nokia today Our approach Connectivity Environment Integrity People Together Key data Assurance 124 6.3 Who we are

Who we are At the end of 2018, we had around In addition we outsource certain non-core activities example, consultants supporting different tasks in and/or use subcontractors to meet customer needs our business groups and support functions, facility 101 200 employees in 119 countries. or volume demands. At end of 2018 the number service providers, security guards and IT support. Three percent of employees were of temporary workers (external temporary labor, Externals are not covered in any of the employee ETL) used for example to cover sickness was in the sections of the report, but instead included in the located in our headquarters in region of 4 500 people. Activities performed by responsible sourcing section. Espoo, Finland. externals, be them ETL or subcontractors, include for

During 2018 Ten biggest Nokia countries by number of employees

Country % of employees1 India 16% 101 203 22% 166 China 16% employees in the year-end of employees were diff erent nationalities USA 11% (102 761 in 2017) women (22% also in 2017). worked in Nokia. Poland 6%

Finland 6%

France 5%

Germany 4% 96 % 8 849 9 988 Russian Federation 3% of employees had employees were hired, employees left Nokia, Hungary 2% permanent contracts (the leading to 10% rate of leading to a 11% total rest were trainees or had new employee hires attrition rate (10 033 in Canada 2% fi xed-term contracts) (9 430 in 2017). 2017). 1 At year-end 2018 (98% in 2017).

Nokia People & Planet Report 2018 Nokia today Our approach Connectivity Environment Integrity People Together Key data Assurance 125 6.4 Making Nokia a great place to work

Making Nokia The market for skilled employees use to shape our core common culture. We focus Integrity is fundamental to how we internally in our business is extremely on selected business priorities and the behaviors work and what we provide for our customers. a great place which drive them best. For example, to drive Particularly in the standards-driven world of network competitive. Our workforce has relentless value creation and execution we need technologies, the choice that customers make are improved decision making; to have the attitude often less between different products, and more to work fluctuated over recent years as we of entrepreneurs we need our people to feel between different relationships. We stand out as have introduced changes in our empowered and autonomous; and to excel in team a trusted customer partner, sustaining long-term work we need to share and act inclusively. relationships through our proven ability to deliver, strategy to respond to our business and fostering a level of trust we work relentlessly to targets and our endeavors. To strengthen these behaviors we have facilitated earn and keep. activities to make them more applicable. Our core culture - Engaging and working with our people – common aspects All company-wide guidance on our cultural direction, the Nokia Way how we define it and what our employees think, are In 2018, Nokia Way manifested itself in initiatives Such changes and uncertainty have caused, and may found on our internal global culture site. The site also which helped apply Drive, Dare, and Care. We in the future cause, disruption among employees as provides a lot of support materials and resources for concentrated on global webcasts featuring our well as fatigue due to the cumulative effect of several Line managers, teams, and employees. Global Leadership team members, educational and Drive reorganizations over the past years. As a result, we fun cartoon strips to depict everyday situations Passion for believe it is essential that we work on creating a Our pursuit of a common culture and high where people chose the most culturally suitable results, customers, corporate culture that is motivational, inclusive, and performance is always done in accordance with our one, a roving reporter who discovered true cases of and products encourages creativity and continuous learning to values of: the company spirit, and on applied neurosciences meet challenges. • Respect: Acting with uncompromising integrity, we solutions to enhance bias free decision making and work openly and collaboratively, seeking to earn improved communication in teams. We foster a culture of high performance and high respect from others. Dare integrity, guided by our vision, brand, and values. • Challenge: We are never complacent. We ask tough Nokia Way global core culture webcasts had 20 000 It is through our people and culture that we shape questions and push for higher performance to active participants who provided more than 8 200 to earn technology to serve human needs. Our pursuit of deliver the right results. comments. The cartoons inspired more than and renew performance with integrity and sustainability – a • Achievement: We take responsibility and 22 000 people who actively participated in Yammer culture that stems from our Finnish roots – is key to are accountable for driving quality, setting conversations and the applied neuroscience why our customers and partners choose to work with high standards, and striving for continuous solutions were used by more than 10 000 people, of us, and why our employees work for us. improvement. which some 4 000 were line managers. The change Care • Renewal: We constantly refine our skills; learning facilitation in the businesses continued with 46 000 for the team Common shared cultural principles and focus on and embracing new ways of doing things and people participating in the change map survey, and before self Drive, Dare and Care is the cultural platform we adapting to the world around us. 600 trained change managers facilitated better change leadership.

Nokia People & Planet Report 2018 Nokia today Our approach Connectivity Environment Integrity People Together Key data Assurance 126 6.4 Making Nokia a great place to work

According to the latest results from our tracking of The most important questions in the CCT are the “Overall, as a company, Nokia is heading our culture cohesion, this has led to a good overall following two target questions, which remain in the in the right direction” was 80 percent culture cohesion across, and belief in, our company, green during 2018. favourable, down 3 points from 2017.” and a strong shared awareness of our Drive, Dare, Care mindsets and culture principles. Most pleasing The arithmetic average for % favorability for is that we have seen significant improvement in the these two CCT Target Statements is 79.5 percent, Dare related areas, where people have said we need down 2 percent and we are using this average “Overall, Nokia’s culture is heading in the more attention. when needing to report one value for employee right direction” was 79 percent favorable, engagement. off one point from 2017.” Our cultural progress and evolution is monitored with a company-wide employee survey, called the The overall CCT result rose 1.5 percent, from Culture Cohesion Tracker (CCT). The CCT’s purpose 82 percent to 84 percent favorability towards the is to measure [via aspirational cohesion ranges] company between 2017 and 2018, bolstered by the employees’ perceptions of our company and inclusion of Nokia Shanghai Bell (NSB) results. cultural direction. CCT results give us a continued quantitative and qualitative employee feedback loop Cohesion ranges on a wide variety of important topics. • 85> Excellent engagement, strong cohesion • 73> Good engagement, solid cohesion Furthermore, the CCT helps identify areas of • 64> Moderate engagement, fluctuating cohesion momentum that may be a cause for celebration • <64 Concerning engagement, weak cohesion inside the company and challenges we may face that imply a need for continued focus. The CCT was held during March and September 2018. Results were used to help each of the business groups and regions update and refine their own respective culture roadmaps, for the sake of effective communications about strengths and taking actions on prioritized challenges.

All 2018 results below are now inclusive of the Nokia Shanghai Bell (NSB) joint venture, which participated for the full year in both 2018 survey rounds. Generally, the inclusion of NSB had a positive effect on 2018 survey scores.

Nokia People & Planet Report 2018 Nokia today Our approach Connectivity Environment Integrity People Together Key data Assurance 127 6.5 Human capital development

Human capital Given the competitive market Nokia People Focus aims to build a high performance, high integrity culture across the corporation. Goals & Learning & development we face in finding and retaining outcomes development skilled employees in our business, End-2-End Employee Experience Nokia In 2018 we focused on employee/user experience to People it is essential that we continually make our people practices available, transparent and Focus applied by ensuring they are agile and fit for purpose. Reward & Dialogue & develop not just our culture, but We conducted interviews with employees to identify recognition feedback also our talent management, and validate pain points, excitements, and what they value or what we should discontinue. Based on this, performance support, and career we continued to simplify our performance and talent development. area, personal and career development, and how we communicate and engage our employees.

Our performance and talent management approach, Annual Development Review called Nokia People Focus, enables the company Simplification in 2018 to have a strategic and integrated framework to In Nokia we encourage managers to recognize Future Talent Growth company goals, individual performance, talent performance, celebrate achievement and talk about In 2018 we focus on talent identification and growth management, career development, reward, employee’s potential and career aspirations as beyond the top 300 leaders. We profiled rising talent and recognition. We are committed to people well as plan for their development in the coming and high potential individuals and with a focus on development and career growth. Regular manager year. In 2018 we rolled out a further simplified succession opportunities, talent rotation, diversity and employee dialogs (1 in 90 dialogs) focus on Annual Development Review including automation and preparing Generation Y for senior positions. five key areas including goals, feedback, wellbeing, of the process, simplified forms, improved Criteria for consideration of talent included aptitude development, and coaching. user-interfaces, and focused communications as a future top 300, rising stars (high performers, and training with the object to reduce the high potentials), fast trackers, key value creators and Our forward-looking approach to talent administrative tasks and maximizing line managers candidates who are on multiple succession pipelines. development starts with all employees as well time to focus more on the important dialog and as development of top talent. All managers feedback stages. Personal and Career Development – recommend development proposals for UI/UX program employees, outlining clear actions for the coming In 2018, 99 percent of all employees had an Personal and Career Development is a high 12 months. We encourage employees to complete approved talent and performance assessment impact topic affecting retention, productivity and a Personal Development Plan (PDP) in discussion against a 94 percent rate in 2017. 2017 is the engagement, while scoring rather low on the CCT with their line manager. Personal development is second year of the new integrated people processes (Culture Cohesion Tracker) results. Therefore, we key to retaining and engaging our employees and and the introduction of a new simplified talent and have focused on the design and implementation of developing their skills. performance assessment to our whole employee base. UI/UX program dedicated to the area of personal

Nokia People & Planet Report 2018 Nokia today Our approach Connectivity Environment Integrity People Together Key data Assurance 128 6.5 Human capital development

and career development. For 2018–2019, we have set three priority areas to improve the user Personal&careerdevelopmentoffering Channels & user interfaces Users & user journeys experience: maximize the value of our current offering in personal and career development, make our user interfaces more convenient and personally Resources PC significant, and broaden focus to meet the needs of different user groups. With focused communication and training, we created more visibility to employees Career move (vertical/lateral) on our service offering, increased the awareness and Processes Mobile make our service offering more easily accessible, relevant and engaging. We can expect reduced attrition (e.g. especially for new hires and top talent),

increase the Human touch in Human Resources and Leaving the Tools Human Recruiting Onboarding PerformingReady for company higher engagement (e.g. improved CCT results). career move Key career & development stages Leadership development Our leaders are redefining themselves to stay relevant in a business world characterized by change, uncertainty, and new opportunities. executives and high potentials with “fast track” 2018 Leadership Development Figures from Aspiring or “ready for next step” development plans. The Leaders to Senior Leaders (excluding nomination- Our world in which we lead is an “and-or” not an nomination programs also include our Coaching for based programs) “either-or” proposition – leaders are expected to Success and Coaching for Growth programs to help • 14 percent more face-to-face workshop sessions be less authoritative and more supportive and our leaders lead in the 21st century,by not solving than in 2017 challenging. They need to manage and lead, to challenges for others, but helping others solve their • 22 percent more technology enabled virtual control and let go, to lead by doing and empowering, own challenges. Our leadership programs aim to sessions than in 2017 to know and not know, and to tell and listen. To this provide the mindset and skills for leaders to engage end, we invest in the development of our leaders. and inspire individuals and teams in a changing In partnership with Harvard Business Publishing we environment. have successfully introduced technology enabled We deliver leadership programs across all levels from virtual, 4–10 week leadership development journeys. aspiring leaders to senior executives. Leadership Some of our leadership programs seek to immerse Already close to 50 percent of the learners in senior programs are differentiated according to leadership leaders in experiential journeys which include external leader level participated in an HBP program in 2018. levels and competencies. The company provides company visits to learn how other companies and self-enrollment and nomination-based programs. leaders are doing in the space of Internet of Things We leverage technology to bring online learning The self-enrollment programs target aspiring leaders (IoT) and to identify new opportunities for our solutions to employees’ fingertips for immediate, to senior leaders. The nomination programs target company. relevant and best content.

Nokia People & Planet Report 2018 Nokia today Our approach Connectivity Environment Integrity People Together Key data Assurance 129 6.5 Human capital development

3 862 Nokia leaders were developed in 2018 through Corporate leadership programs

Target group Aspiring First Line Leaders Leaders of Leaders Senior Leaders Executives Several levels of Total leaders leaders Number of individuals 683 (+15%) 1 557 (+4%) 846 (+8%) 212 (-5%) 209 (-36%) 355 (+52%) 3 862 (+9%)2 developed1

1 In parentheses change to 2017. 2 24% of the participants were female.

346 leaders participated a new program called stakeholders to understand their business objectives, In 2018, NokiaEDU targeted an increase in digital Communication, Collaboration and Coaching rolled develop essential competencies and recommend self-paced learning methods: out in 2018. The program was designed to support learning solutions to address performance gaps. • overall learning for Nokia Employees Hours leaders with the challenges of constant change in a Should an existing learning solution not meet increased by 51 percent year-on-year new agile environment. the needs, a new learning solution is designed, • overall average learning hours per learner developed, and delivered. increased from 16 hours in 2017 to 30 hours in Chatbot in Human Resources 2018 Digitalization and AI opportunities In 2018, NokiaEDU delivered 2.2 million training • increase online learning unique registrations: In 2018, we introduced a new Global HR chatbot hours to our employees (1.6 million in 2017). Target: +20 percent. Result: +58 percent and a Finland HR chatbot. This now enables 24/7 Consistent with its digitalization strategy, about • increase in virtual classroom sessions: Target: +25 HR service for selected global HR topics, and also 75 percent of employee training was technology- percent. Result +29 percent available for all Finland employees. With the help enabled, saving the company time and money over • increase in use of managed learning communities: of new chatbots, employees can get the relevant traditional classroom training. Virtual instructor- Target: +20. Result: +28. information faster, more easily and in a more led training accounted for 19 percent of employee • development and execution of AR/VR solutions: condensed format. In addition, we understand training, compared to 21 percent in 2017. Target: +5. Result: +10 better and faster what employees are asking for, and also get faster feedback on HR services. NokiaEDU also provides training to customers and partners, which in 2018 totaled 770 000 training NokiaEDU hours (838 000 in 2017). Our training not only The primary objective of NokiaEDU is to create a instructs how to operate and maintain our products, learning culture across the company, where our but also includes more general technology training Due to the fluctuations in headcount across the year, you cannot directly compare point 1 against point 2. Covers employees, customers, and partners can easily on topics such as Internet of Things. Overall, only “completed learning” via Nokia’s central learning hub access relevant learning solutions. NokiaEDU works NokiaEDU learning solutions received a user and not “self-declared” learning as we have no way to in close collaboration with its internal and external satisfaction score of 96.9% in 2018 (97.7% in 2017). validate that.

Nokia People & Planet Report 2018 Nokia today Our approach Connectivity Environment Integrity People Together Key data Assurance 130 6.5 Human capital development

Learning Index Average number of training hours per employee more than doubled from 2017 to 2018 NokiaEDU’s approach to creating a company-

wide learning culture is driven by the Learning 40 Index, an innovative application launched in 2018 35 34 to automatically and continuously monitor an 30 individual’s learning and sharing progress. 20 19 16 10 Following the principle of “What gets measured 0 gets done,” the Learning Index awards points for 2015 2016 2017 2018 completing Defined, Recommended and Freestyle Learning, as well as Self Declared Learning and Nokia Group Social/Community Learning and Information sharing sessions.

Nokia’s greater focus on professional development supported by the Learning Index resulted in a Case: Global Day of Learning 48 percent increase in employee learning over its “Bravo! Best event Our third annual Global Day of Learning (GDOL) 2017 total recorded as formal completed learning, was a special event dedicated to reinforcing our yet an overall 113 percent increase that includes of the year at Nokia.” culture of learning and our core value of renewal. It learning that was completed outside of the formal presented a unique opportunity through a full day’s 2018 Global Day of Learning Participant learning environment, resulting in an increase from schedule of virtual and in-person learning events, 16 hours to 34 hours of learning per person on where our leaders highlighted how we are shaping average. NokiaEDU will continue to expand the reach our company and the future of technology. At the of the Learning Index in 2019. end of the day, our goal was for all employees to gain a better understanding of our strategy, how Personalized Learning different parts of the company contribute to it, In response to numerous requests for improved access In addition to Personalized Learning, NokiaEDU and what we need to do collectively to realize our to relevant learning, NokiaEDU launched a Personalized introduced a number of improvements in 2018 ambition. In the days following the live event, all Learning feature to the company’s Learning & offering a more cohesive and user-friendly the recordings of the sessions were made available Development Hub. A complement to trending learning experience for learners. This comprehensive as part of the Global Day of Learning Encore. The found in The Learning Store, Personalized Learning initiative features a new askEDU chatbot designed 2018 Global Day of Learning gathered 31 082 uses Machine Learning and social collaboration to offer to accelerate speed of responsiveness to learning- webcast participants across all sessions (53 percent relevant and engaging content. related inquiries. increase over 2017), and 92 percent stated they would participate in another GDOL.

Nokia People & Planet Report 2018 Nokia today Our approach Connectivity Environment Integrity People Together Key data Assurance 131 6.6 Ensuring decent working conditions and fair employment

Ensuring We uphold high standards of ethics Standard Operating Procedures (SOP), and Code Freedom of association and and rights in our own internal of Conduct are implemented to help achieve the collective bargaining decent working high standards we have set ourselves. The policies In line with our Code of Conduct, we respect the right activities, and aim to treat all our cover: to collective bargaining and freedom of association. • Child labor avoidance Collective bargaining agreements are local, and in the conditions and employees in a way that satisfies • Forced labor avoidance vast majority of countries where we have collective internationally recognized ethical • Freedom of association and collective bargaining bargaining agreements, those also cover employees fair employment • Non-discrimination who have chosen not to be members of a union. and responsible business practices, • Humane treatment Furthermore, employees are free to join, not join, or customers, investors, partners and • Working time leave unions and associations of their own choice, • Disciplinary practices and select their representatives in accordance the relevant legislation, whether • Compensation with the local and international practices. Our global or local. • Occupational health and safety. management supports, encourages, and implements active, open communication and dialog with This approach is also applied to our suppliers and employees and/or employee representatives. partners. You can read more on our supplier practices A management framework under Responsible Sourcing. In countries where local works councils operate, we for labor conditions recognize their importance and work with them as We understand it is our basic responsibility to provide Zero tolerance for child and forced labor required. We communicate regularly and continuously decent working conditions and to be seen to be fair We have a strict policy against using child labor and with employees directly as well as in specific and just in how we treat our own people. Our Code of zero tolerance to all forms of forced, bonded, or meetings such as the European Works Council (EWC) Conduct provides the basis for our labor conditions imprisoned labor in our own operations and our in Europe. In annual EWC plenary meetings both and and is underpinned by Nokia Global Human supply chain. Where such a potential risk is identified, employees and management are represented in the Resources Framework and local employment laws, it is thoroughly investigated, and a remediation plan teams preparing and participating in the meeting. We policies and practises. We adhere to the United is put in place based on SA8000 recommendations. also offer the opportunity for free elections where Nations Universal declaration of human rights and the For more information on child and forced labor, see employees can choose their union representatives. Global Compact and wherever we operate we meet Conducting our Business with Integrity. All our production employees were represented by the requirements of labor laws and regulations, and an independent trade union or covered by collective oftentimes strive to exceed those laws and regulations. Per recruitment policy and practice the identity bargaining agreements. and age of candidates are checked at hiring We publish information related to policies and to ensure that the terms and conditions of Employee representatives are entitled to participate guidelines on our intranet. employment are in accordance with local legislation in trainings that are a necessity in order to take care as well as with the internationally accepted labor of employee representative duties and to increase We are aligned with key elements of the social standards. Proof of identity and age are part of their awareness of trade union rights and obligations. accountability standard SA8000. Our policies, minimal vetting standards. Additionally, employee representatives are provided

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the opportunity to use company infrastructure Non-discrimination Disciplinary practices during the work day. We do not tolerate discrimination in any way, shape, We appreciate that our employees are generally or form. We prohibit discrimination based on any motivated by their work, understand and follow Below is a sample of countries where we operate and personal attribute such as age, gender, nationality, our processes, and act consistently with our values where 100 percent (or close to it) of the employees opinions, memberships (such as membership or and required standards of conduct and attendance. are covered by collective bargaining agreements. non-membership of a trade union), religion, or However, if an employee’s conduct or attendance • Algeria disabilities in all employment practices, including does not conform to these expectations, disciplinary • Austria recruitment, promotions, training, and pay levels. action may be taken. • Belgium Diversity is discussed later in the Diversity section of • Benin this chapter. Our approach to disciplinary action, as stated in • Brazil our disciplinary SOP, is to ensure fair and consistent • Burkina Faso Working time treatment of all our employees. The procedure • Cameroon We do not permit our people to work more than recorded in the SOP sets out the steps that may be • China legally allowed. We define regular working hours in adopted in relation to conduct and/or attendance • Czech Republic accordance with local laws. Young workers from 15 issues. In cases where local law and/or collective • Finland to 18 years old or as specified by local legislation agreement(s) require additional or different • France are not permitted to carry out work that may be procedures, we follow local law and/or applicable • Germany hazardous, unsafe, or unhealthy, are not allowed collective agreements. We will not tolerate any form • Italy to work night shifts, and have a maximum daily of physical, mental, or verbal abuse, or harassment. • Madagascar working time of eight hours. Working time is the • Mali time an employee must be available, ready to work Compensation • Netherlands and perform duties monitored and regulated by the We pay at least the minimum wage or the appropriate • Niger employer. We provide guidance through the worktime prevailing wage, whichever is higher, comply with all • Norway standard operating procedure, and encourage project legal requirements on wages, and provide any legally • Portugal recording to address resource planning issues versus or contractually required benefits. • Romania working hours. We guarantee the minimum one day • Senegal off in every seven days in our production operations. Furthermore, part-time or temporary workers are • Slovakia not excluded from our employee benefits plans • Spain We take work/life balance seriously, providing training due to the company policy or benefits practice. • Sweden for managers on the signs and dangers of overload We have a strong focus on developing diverse • Togo at work, as well as offering various extracurricular talent across the organization. This includes pay • Tunisia activities and facilities for sports, exercise, and practices which are regularly reviewed to align pay • Zambia wellbeing. We engage regularly with our employees with performance, experience, and skills required on both a global and local level on these topics. for every position. Awareness raising on diversity,

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that we included in training material to HR and managers during the annual salary review process, created a foundation for renewed success in this focus area.

This framework incorporates the following programs: • The Everyday Excellence award, which has been created to foster a global and uniform approach to recognizing a colleague across the organization for on-the-spot peer-to-peer recognition throughout the year. • The Business Excellence award is a flexible business driven award and is meant specifically for recognizing those whose contribution directly supports business objectives. • The Premium award has a business-specific eligibility: Deal of the Month, Innovation, and Quality award programs are launched separately.

Our reward programs are designed to attract and retain key talents and engage our employees. They reflect our values, they are understood and valued by employees, and they contribute to our business success by balancing market competitiveness and between line managers and employees, and greater Share in success affordability based on a total reward approach. These rewards for individual contribution. Our employee We offer an employee share purchase program are performance driven (both on an individual and reward and recognition program, Recognize called Share in Success. Under the program, company basis), flexible, and fair. The key elements of Excellence, empowers employees and managers employees are given one free matching share our compensation structures are annual base salary, with a discretionary budget to perform peer-to- for every two shares they purchase and continue incentive/bonus programs, recognition programs and peer recognition and rewards. Aligned with and to hold for 12 months. We aim to invite as many long-term incentives. For more information see the underpinned by our values, this allows more frequent employees to participate in the program as Compensation section. and less formal ways of recognizing individual possible, subject to local laws and regulations. ln performance. The Recognize Excellence provides a 2018, 36 percent of the eligible population in 68 Our approach to performance management and tool and a mobile application, which makes it easy to countries chose to participate in the program. In rewards highlights the importance of quality dialogue acknowledge the contribution of colleagues. 2019, it is intended the total number of eligible

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countries will be 72 (out of a total number of 123 Gender diversity focused more. They also post the latest jobs and allow for countries where we operate). recruitment programs companies to have their own profiles to promote We are committed to creating a dynamic work their employer brand. In 2017, we won recognition for this program from environment that values diversity and inclusion, the World Centre of Employee Ownership with our respect and renewal, customer focus, and innovation. We take our Glassdoor reputation seriously and flagship award of Best International All-Employee In 2018, globally, female share of hires stood at are proud to score among the best technology Share Ownership Plan 2017 and were also recognized 23 percent out of the total hires, compared to companies. We have observed a positive evolution of by the Global Equity Organization for Best Use of an 24 percent in 2017 and 21 percent in 2016. our overall rating from 4.0 to 4.2 (scale from 1 to 5) in Employee Share Plan in an Emerging Market. the last 12 months which positions us as an employer To increase diversity for example in the India region, of choice on the market. Also 85 percent of the review Recruitment we have introduced various initiatives focused on providers indicated they would recommend us to their We have taken active steps towards promoting recruiting diverse talent, both at the lateral and friends compared to 83 percent in 2017 and see our diversity awareness in the hiring process by rolling out graduate level because we know that the success of culture and values (4.2 compared to 4.0 in 2017) and a Diversity in Recruitment video for hiring managers our female employees is key to our success, and we work/life balance (4.3 compared to 4.1 in 2017) as two to recognize and remedy bias in the selection process. are committed to supporting the professional goals of our main strengths. Our approach is to ensure that we treat all candidates and aspirations of our female colleagues. In 2018, fairly and with respect. Candidates do not pay for in India, our graduate diversity hiring improved to More information on recruitment and careers can recruitment costs. All recruitment costs are carried by 49 percent from 40 percent (2017). be found at www.nokia.com/careers. Or visit us on Nokia. None of our vendors are charge candidates for LinkedIn, Facebook, Twitter @NokiaCareers. Learn recruitment costs. Social media for careers more at www.glassdoor.com/nokia. On our Global Careers social media channels we share Recruitment of new talent is key to implementing stories from daily life at Nokia and show our culture Supporting young talent and apprentices our strategy, supporting youth employment, and through authentic stories of our employees. You can We value the importance of supporting graduate enhancing our contribution to the communities find us on LinkedIn, Facebook, Twitter and Glassdoor. trainees and apprenticeships. We implement a range in which we are present through our traineeship of programs in various countries where we operate. programs. We also encourage and support internal Glassdoor is an authentic career community where development of our whole global employee current and former employees anonymously share Our approach is by definition local, as it is part of population by promoting all non-executive job reviews addressing company culture, values, and the local community identity. Below are a number of vacancies internally first, for a period of ten working what their working life is really like. The platform examples from around the world in 2018. days, prior to inviting external applications. In has a huge range of reviews covering: CEO approval 2018, 51 percent of hires were internal, compared ratings, salary reports, interview reviews and In Canada, our Future Tech internship is a seven- to 59 percent in 2017. questions, benefits reviews, office photos, and much week program for high school students to work

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alongside our engineering teams solving real, Global mobility is typically encouraged and enabled • employees affected by restructuring are entitled technical problems. through short-term assignments or alternatively, if to severance packages which are often higher than the need is long-term or even permanent, transfers local statutory minimum. In the United States, we offer students exposure to under local agreements. This is reflected in the further • we support & encourage redeployment activities the latest technologies and industry challenges in decrease of long-term assignees, as in 2018 we had for impacted employees to find new job telecom today. It is part of our culture to train young 334 employees on long-term assignments across the opportunities in the company, including re-training people and integrate them into our teams. regions (compared to 397 in 2017). In 2018, we had as necessary. 2 604 employees on short-term assignments. • we also offer career counseling and job search In India, our University Collaboration Program offers support outside the company. customized learning experiences designed for our Providing support during restructuring • we offer employees continued training prospective young talents. The business environment Nokia operates in is opportunities to maintain and develop their a challenging one: the landscape remains tough skills and competencies to meet the anticipated In the Middle East and Africa, we launched our female and we are facing continuous price pressure from changes in business, markets, and the technology graduate program in early 2017 running until the end our competitors as the opportunities of the 5G environment in which we operate. of 2018. era unfold. Following the successful integration of Alcatel Lucent and having achieved the synergy The overall number of employees decreased by In China, we have the Nokia Club, which is a savings target in 2018, we are on the right strategic 2 percent by year-end, while the attrition increased Cooperation with universities for talent development. path. However, in order to reach our goals and by one percentage point to 11 percent, when maintain best-in-class cost leadership we must comparing 2018 with 2017. In Asia Pacific and Japan, we ran an internship move faster and accelerate our strategy execution. program in Singapore with a total of seven interns To achieve that goal the company has announced between May and July 2018 and in the Philippines, a cost savings target of EUR 700 million to be we managed to hire 70 graduates into R&D positions. reached by the end of 2020. Delivering against this commitment has required that we reduce For more information on these programs visit the number of employees that we employ. These Respecting people section. reductions are never easy. Throughout the process, we have made it a priority to provide support for International mobility those employees and to treat them with dignity We have a strong global presence and concentrate on and respect. attracting and retaining the most competent talent. Based on the mode of operation and business needs, We have put in place extensive measures to limit the we balance local talent development with global impacts of restructuring (including reorganizations mobility opportunities. leading to headcount reductions), such as:

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Diversity, We cultivate a globally diverse We have a Gender Balance Steering Committee that locations to help them balance the demands that makes decision proposals to the Group Leadership come with being a working mother in India. inclusion, workplace culture of respect across Team and steers our various gender balance • In June, Nokia ran several global events during six continents. We believe that a programs. The GLT members took actively part in the LGBT+ Awareness Month. There were variety high-touch global women leadership programs acting of topics that related to speaking out for even and anti- diverse workforce is our platform as mentors or sponsors to the Inspiring Women greater inclusion. Leaders and C-Suite Prep participants. • In July, Greenhouse hosted a unique startup X discrimination for greater innovation, superior corporation event with its leading members. organizational performance, and At the end of 2018, Bloomberg made the decision • In September, Nokia employee group IDEAL to include Nokia in their 2019 Gender-Equality (Individuals Dedicated to Enabling Accessibility in delivering excellent service to our Index (GEI) for our transparency and commitment Life) hosted a Walk to End Alzheimer's in Naperville customers. We believe in the power to advancing women's equality globally. The GEI is US to drive efforts and donations for finding a cure a comprehensive investment-quality data source for Alzheimer's disease. of global sharing of ideas and on gender equality. With a Gender-Equality Index • In September, The Village of Diversity hosted a culture. of 84.08 Nokia is ahead of the average of its peers virtual event and jamming session about The Big (70.26 for the 26 technology companies listed). C to raise Cancer Awareness with guest speakers sharing personal stories reaching ~3,000 active Inclusion – highlights participants. As stated earlier we do not tolerate discrimination. of our activities in 2018 • In October, the U.S. Antenna (Women’s Leadership We prohibit discrimination based on any personal • On March 8, the International Women’s Day was Network), launched a US-specific StrongHer attribute such as race, ethnic origin, color, nationality, celebrated across the majority of Nokia sites Award to recognize outstanding women in the disability, religion, age, gender, sexual orientation, globally. The Village of Diversity published a special organization. gender identity, characteristics, or expression, in gamified chapter featuring strong female leaders • On November 16 , we signed the UN Standards all employment practices, including recruitment, and talents from within Nokia and outside. The of Conduct for Business (unfe.org/standards), promotions, training, and pay levels. We have a gamification platform used was YOUnik, a game pledging our support for LGBT+ people worldwide. strong focus on developing diverse talent across the developed inhouse at Nokia to raise awareness • On November 19 ,, we celebrated Men’s Day at organization. This includes pay practices which are on diversity and inclusion in an innovative way, many sites including Espoo, Noida, Oulu, and regularly reviewed to align pay with performance, by discovering human greatness and what makes Tampere sites. The event was celebrated with all experience, and skills required for every position. everyone unique. the fervour to acknowledge the spirit of wonderful • In April, Nokia COO hosted a virtual event and men around us. In 2018, awareness was raised for the third year in jamming session to highlight the Three A’s - • In November, the annual Greenhouse event in a row on diversity by providing Gender Dynamics Alzheimer’s Asperger’s and Autism. A lot of personal Munich took place with the intention to boost Workshops to Line Managers to make them aware of stories were shared, followed by discussions. women networking in and outside of Nokia. More their biases, give them tools to mitigate them and • On April 2, Nokia India started providing creche than 100 top female leaders from 30 companies make Nokia’s leadership overall more inclusive. facilities for employees working across major attended to discuss why gender diversity makes

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business sense. The theme of the event was “Are Average age range of Nokia employees in 2018 you IN³ - inspirational, intuitive, innovative?” • On November 19, our Chairman, Risto Siilasmaa, signed the pledge of the European Round Table of Under 20 20–29 years 30–39 years 40–49 years 50–59 years 60 and above Industrialists. This way Nokia wants to carry higher societal responsibility to decrease social inequality and to promote inclusion and diversity in the 0% 14% 35% 31% 17% 3% workplace and inclusive growth in Europe.

Gender balance The diversity of our Board of Directors consists of a number of individual elements, including gender, generation, nationality, cultural and educational backgrounds, skills, and experience. We believe diversity is not a static concept, but rather a relevant mix of required elements for the Board as a whole that evolves with time based on, among other things, our relevant business objectives and future needs. Board diversity is treated as a means of two career development programs for talented • participate in building a long-term female improvement and development rather than an end women, who are undergoing one year’s talent pipeline within the Information and in itself. At the end of 2017, the gender balance of Executive Sponsorship, Mentoring, Networking Communication Technology (ICT) sector by our Board of Directors was 70 percent male and and Executive Coaching. Among the alumni, helping to bring more women and school aged 30 percent female. Our aim was to have a minimum 35 percent have moved on to higher level girls into Science, Technology, Engineering and representation of 40 percent from both genders positions. Mathematics (STEM). on our Board by 2020. We reached this milestone • support Nokia business groups, corporate in 2018 with current representation of 40 percent functions and regions to develop their female We hosted several G4G-events to drive the interest female and 60 percent male. employees and leaders and build a sustainable of 11–15-year-old girls for STEM. We collaborated pipeline of female talents. with greenlight for girls, a non-profit organization In 2018, 15.3 percent of our leadership positions • foster a gender-neutral culture through training focusing on driving girls’ interest for STEM through were held by women. In total, women accounted for for leaders and managers on gender dynamics interactive and fun workshops. In 2018, we invited 22 percent of our workforce. We are committed to: and unconscious bias, equipping them to best around 1860 girls to experience a day of science at • develop more talented women into leadership manage diverse teams and ensuring that all our Nokia hosted by 600 Nokia volunteers. to bring the proportion of female leaders in processes and communications are gender-neutral every organization in line with the proportion and inclusive. In 2018, over 900 leaders and In addition, our location teams also participated in of women in the workforce. We are running employees were trained on gender balance topics. the ITU initiated Girls in ICT Day and Girls Coding Day.

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Here are some highlights: and across other firms. Within this network women qualified female leaders. A new monthly series • Throughout the year 2018 greenlight for girls connect, share and support each other. There are of career workshop kicked-off to up the women’s events were organized at Nokia sites in Paris- approximately 180 female leaders in this network, business acumen, presentation skills and technical Saclay, Murray Hill, Shanghai, Hangzhou, Madrid, mainly in Europe, but spanning 12 countries in total. knowledge across key themes. Espoo, Tampere, and Oulu among other locations. • In April 2018, Nanjing technology center Greenhouse wants to: StrongHer is an inclusive employee network participated in the international event of ITU • discover, unveil, foster and grow women’s potential aiming at a company where women have the same called Girls in ICT Day, opening its door to 27 • promote women in their career opportunities as men and are well represented in all female students from Nanjing University of Posts • enrich our skills via Workshops, Fireside Chats and business domains and functions. and Telecommunications. The students visited Network extensions the Nanjing R&D office and lab and enjoyed • offer best-fit female talents for the organization Initiated and led by employees for employees, various technology workshops. Three female • place the right, qualified and successful ladies in StrongHer is a multi award-winning initiative which experts and Nokia role models shared stories top management contributes to women’s empowerment, helping them from their career paths and examples of personal • provide a lifetime membership to encourage best unleash their potential and magnify their business choices with the students. At the end, most possible networking and mentoring. contribution, and increase the representation of of the participants enrolled for an internship women at all levels and in all job functions in our program at Nanjing Technology Center. Also, The Greenhouse vision for 2030: company. Nokia Beijing opened its doors for 200 girls to • Women around the globe are connected via engage in active planning of their careers in networks The network is a grassroots movement created in STEM. • 50 percent of companies are run by women 2011 by six female employees in France and is open • Greenhouse in Nokia in Germany hosted a • Empowered women in leadership roles are normal to all employees, men and women, executives and Girls’ Day, for girls over 10 years old, featuring and we’ll stop spotlighting them non-executives. workshops and various product stations, making engineering and technology very practical and In 2018, Greenhouse, started a cross-industry initiative Statistics as of January 2019: interesting, as well as discussions about how to to link women across 17 corporate women networks. • 3 000+ members build a career path in STEM. It took place across Companies connected are for example Allianz, BMW, • 70 countries on five continents four Nokia sites in Germany and hosted >200 girls. Deutsche Bank, Infineon, Kuka, Microsoft, M-Net, • 43 active chapters led by a community of 90+ Siemens, SWM, and Unicredit, as well as several leaders Greenhouse and StrongHer – employee startups. • 24 percent male membership. networks that promote gender balance Greenhouse is a women’s network for female Nokia In 2019 and beyond our Greenhouse will be StrongHer advances gender diversity by offering employees as well as externals. The network kicked intensifying the work in the ecosystem across networking opportunities, personal development, and off in 2010 with the aim to put the best females corporations, innovation and internationalization, a think-tank on leadership and management. It also forward and to connect talented women within Nokia while growing the network with further highly provides exposure to diverse role models for women

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and men, along with business contacts within and Renault, Sanofi, EDF, Nestlé, Sodexo and customers businesses to help them grow, ensure their beyond the technology sector. StrongHer has been an like Vodafone and AT&T. sustainability and assist with job creation. We have eye opener on the many causes for low representation a committee that continuously review the impact of women in the ICT industry and in leadership roles. Following the GEM-TECH Award received from the of our interventions/support and the success of There is not just one glass ceiling, but some often- International Telecommunications Union (ITU) and those businesses. occuring explicit or more implicit patterns and reasons United Nations Women (UN Women) community, • Skills Development – We established a dedicated that are encountered at various stages of women’s StrongHer has been invited to be part of the and sustainable skills transfer program aimed lives and careers, caused by others and women Advisory Board of the EQUALS (formerly GEM-TECH) more importantly at developing women with themselves. StrongHer works on three axes: DARE, ACT, Award since 2017. potential for advancing in leadership roles within and INSPIRE. the company. We have implemented learning StrongHer was awarded in 2018 DonaTIC award for programs for blacks including black women and To ensure impact on the three axes, StrongHer builds Women in IT in Spain, initiative from the Government disabled learners. and deploys its emblematic worldwide programs of Catalunia. in partnership between its network of worldwide We also strive to implement a targeted procurement chapters, Nokia Diversity & Inclusion organization Black economic empowerment strategy geared to increase procurement spend from along with the support of Nokia Executives: In South Africa we are committed to good companies which have made significant progress • StrongHer Awards to spotlight talented women governance practices, transparency, and in the area of BBBEE. Our community investment role models compliance with all Broad-Based Black Economic activities are managed by a dedicated committee to • Knowledge, Information and Wisdom for Empowerment (BBBEE) codes of good practice. manage the initiatives linked to the socio-economic employees with KIW-e Mentoring program to We have an obligation to promote Black Economic development of South Africa’s disadvantaged help employees promote innovation through the Empowerment Programs, and also to ensure communities. creation of an expert community to share business alignment to our group diversity programs. Hence issues and improve visibility through our BEE plan, we always commit to We also have targets to increase the ratio of blacks • KIW-e webcast where executives and experts achieving specific BEE deliverables and actual target in the company and we continuously measure shared business relevant knowledge percentages for each deliverable. achievement, equally importantly, women in leadership • A charter for managers to explicitly walk-the-talk positions. As per our plan, we want to ensure we on gender balance, to publicly commit to take Priority deliverables of the five BBBEE elements: achieve our targets through our recruitment process gender inclusive actions and become certified • We strive to comply with the minimum and internal promotions. To achieve our target, we champions of the StrongHer values. requirements of these priority elements) have a local Vetting Committee which evaluates • Ownership – We continue to maintain our effective and manages the appointment of new employees In 2018 StrongHer organized 120 local events with black equity ownership with 31 percent black according to our BEE Management Control plan. We attendance by 5 600 employees worldwide, notably women ownership. have also put in place targets for a women’s graduate events in collaboration with external companies or • Enterprise development – We continue to program as a plan to improve our women ratio and networks including Capgemini, Deloitte, HP, Randstad, contribute to the development of smaller black ensure a robust women talent pipeline.

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LGBT+ inclusion Equal opportunities for disabled employees Germany In November 2018, our company officially declared Providing equal opportunities for disabled France - Mission Handicap its support of the United Nations Standards of employees is a proven and professionally established Conduct for Business and is the first company in In France, the Mission Handicap program, designed commitment in Germany. Company and employee- Finland to do so. The standards are a framework in 2006 to better integrate disabled employees into elected representatives for severely handicapped for businesses to prevent discrimination based on the workplace, was established to meet the legal employees work together to coordinate processes sexual orientation and gender identity. This marks quota of 6 percent of disabled employees in French and actions for training and awareness, job postings, a significant step in our journey to take concrete companies. recruiting, working environment, and external partner actions to foster an inclusive workplace where cooperation. We have a sustainable implementation everyone can be their authentic selves. The program includes several action plans such as and a current disabled quota of 4–5 percent. hiring activities, equipment adaptations, tool or EQUAL! (the Nokia LGBT+ Employee Resource facility accessibility, training of employees including Group) is an educational and support group for managers, HR recruiter and colleagues, digital our employees who are lesbian, gay, bisexual, accessibility sensitization, as well as communication transgender and other related groups (LGBT+) or who and awareness sessions for all employees. Nokia have family, friends, or colleagues who are LGBT+. France reached a ratio of 4.55 percent of disabled 2018 was another year of expanded reach for EQUAL! employees by the end of 2018. through the internal employee social network with members roughly doubling in number, and expanded @talent Egal activities including: We co-lead @talentEgal, a non-profit association • LGBT+ awareness month content which included gathering together Nokia, Safran, SII, Dassault three company-wide events to raise employee Systèmes, GE Healthcare and several universities/ awareness on best practices, allyship and a more engineering schools in France. @talentEgal helps global perspective on what it means to come out. disabled postgraduate students gain employment • Increased visibility with the LGBT+ rainbow flag by providing them with training, internships, or flown on several Nokia campuses (Paris-Saclay, other forms of work experience. Learning through Ottawa) during Pride Month and a pilot run of LGBT mentorship by partner’s employees helps students + Allies rainbow Nokia lanyards to express support reduce their self-censorship, improve their skills, to LGBT+ colleagues, and spark discussions of and enables them to be prepared for successful what inclusion means at Nokia. occupational integration. Several of our employees • Several local events in Nokia sites (Budapest, accompany students and mentor them in developing Ottawa, Paris-Saclay) to bring up the topic of their soft skills, their English skills, and their LGBT+ inclusion. knowledge of the job market. In 2018, @talentEgal helped 78 disabled students.

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Strengthening In our networks’ businesses, employees and contractors face our health inherent risks when installing and safety and maintaining equipment and performance constructing base stations on behalf of our customers. We focus on ensuring that all our employees and contractors are aware of the risks related to their jobs and receive the necessary training and equipment to work safely, whether in the office or on site. We address job-related health and safety risks through training, analysis, assessments and consequence management. certified with the internationally recognized OHSAS potential incidents and to set strategic direction. In 18001 standard and certified by a third party, Bureau addition, our senior leaders are increasingly involved Veritas. The management system covers activities in matters of safety through regular reviews and We have established a wide range of programs to within all networks business groups, customer site tours. We aim to create a culture among our improve our health and safety (H&S) performance, a operations and supporting corporate functions. As employees and contractors that identifies hazards description of which is available in a table on the next of year-end 2018, coverage of employees within the and supports active risk prevention and action, page, and encourage reporting of near misses and scope of that certification was around 78 percent. so that we can significantly reduce the number of dangerous incidents by employees and contractors. incidents that occur. Group Leadership representatives review our health Our health and safety management system serves and safety performance on a regular basis through Our health, safety and labour conditions policy can as a basis for our overall program and is an integral a Consequence management committee. These be found at www.nokia.com/about-us/investors/ part of how we manage health and safety and is meetings are held to review all fatal and high- corporate-governance/policies.

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H&S programs

Method Purpose and benefit Embedded in Applicable to

High Risk Project For all projects where high-risk activities are identified (such as work at height, driving or electrical work), the hazards Sales & Execute Process Nokia Implementation are highlighted and assessed. Appropriate controls are defined and implemented using a consistent assessment format Assessment (HRPIA) and criteria called High Risk Implementation Assessment (HRPIA) with project teams, safety and relevant stakeholders such as procurement and quality. Examples of some of the areas assessed are: adequate resources assigned to ensure project for safe delivery, suppliers evaluated and qualified prior appointment, Nokia non-negotiable H&S requirements and rules are implemented, expectations are communicated to and apply equally to any supplier, and H&S performance monitoring along with operational performance is linked. This process is embedded in Nokia’s Sales & Execute Process and is a required step in project deployment.

Supplier Maturity Supplier Maturity Assessment (SMA) is an evaluation method to determine the suitability of the safety controls Supplier Base Management Nokia and Suppliers Assessment implemented by suppliers performing high-risk activities on Nokia’s behalf. As part of Supplier Base Management, (SMA) the SMA is a detailed evaluation, typically conducted face-to-face at a suppliers premises by H&S professional to determine capability by looking at specific put controls and processes in place. This provides Nokia with a measure of the H&S Management Maturity of the supplier and the results are provided to the procurement and project teams to understand the risk and controls in place.

Incident investigation Understanding incidents is important part of the H&S program so that future incidents can be prevented. All employees Health, Safety, Security and Environment Nokia and Suppliers and contractors are encouraged to report incidents including near miss, medical treatment and lost time incidents. All (HSSE) fatal, critical and high potential near misses are fully investigated and preventive actions are put in place to prevent a similar incident from occurring. Actions are reviewed regularly and are tracked to completion. All incidents are reported and maintained in the database.

OHSAS 18001 Nokia has two main processes for assuring H&S. External assurance is done by Bureau Veritas for the OHSAS 18001 Quality, Infernal Audit Process Nokia Certification global H&S certification. Internally, assurance is done by performing internal audits and conducting Operational and Operational Reviews, which are a comprehensive review of country risk and operational controls in place. Reviews

Consequence Supplier performance is a key part of the H&S program. Failure to comply with H&S requirements that can lead to a Procurement Suppliers Management fatal or disabling injury, or a major non compliance with H&S contractual requirements are addressed as part of the consequence management program and may result in a warning to the supplier (yellow card being issued) or to the termination of contract and the phase out of the supplier (red card being issued).

Quality Awards Recognition of achievements in H&S is important to generate innovative ideas and encourage participation in the H&S Quality Awards Nokia program. People Excellence is the category related to H&S and is part of the Quality Awards. 1

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Addressing key risks through training and assessments Health and safety are embedded within our Code of Conduct and is therefore included in our Ethical Business Training. In this training we emphasize the importance of identifying and avoiding risks and reporting incidents. In addition, we run campaigns that focus on the key safety risks for our employees and contractors and encourage open reporting of incidents and near misses by contractors and employees.

In 2018, we continued to emphasize our non- negotiable rules called the Nokia Life Saving Rules, which include six simple safety rules related to our top risk areas: driving, working at height, contractor management, and electrical activities. By the end of 2018, 100 percent of suppliers delivering high-risk activity had been assessed using our H&S Maturity Assessment Process and 89 percent (81 percent In our collaboration event in Dar es Salaam, Tanzania Work at Height video was demonstrated to give those not familiar in 2017) of assessed suppliers met H&S compliant with tower climbing the opportunity to experience it. supplier status. Please read more on the 2018 performance of the supplier H&S related programs in the Responsible sourcing section. Our health and safety performance miss incidents by both employees and contractors In 2018, there was one (four in 2017) fatal increased by 9 percent, with 454 incidents reported in We continue to conduct project readiness incident resulting in the death of one (five in 2017) 2018. assessments to more closely review high-risk contractor/subcontractor personnel while carrying projects in each market. In 2018 we conducted out work on our behalf. The fatality was related to Wellbeing 224 reviews across all markets (cumulatively over working at height. Any such serious incidents while In order to thrive in the programmable world, we 800 since 2016). The assessments are conducted carrying out work for Nokia are unacceptable. need to establish a framework that supports and with a team of key health and safety stakeholders enhances the changing nature of how, where, and and project team members, assessing project Lost-time incidents of our employees decreased by when we work. We are focusing on driving sustainable controls using a formalized process and assessment 5 percent between 2017–2018, while there were 39 business value through productivity, innovation, and tool. Projects are scored and tracked to identify incidents in 2018. It is a positive sign of our safety creativity. Our ambition is to embed wellbeing into improvements as needed. culture that at the same time, reporting of near our culture in such a way that it is recognized as a

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key enabler of performance excellence and business professional care for every employee. We know that We design products that transmit and success. from time to time, everyone experiences situations receive radio frequency (RF) energy. that affect their general wellbeing, which can have We ensure that our product portfolio, Our health and wellbeing framework an impact on their performance. We want to make consists of three pillars: sure we provide the best possible support in these including macro cells, small cells and Wi- Thrive aims to create a culture of wellbeing and matters. The Personal Support Service is Nokia’s Fi, comply with established national and empower everyone to make smart decisions so that Employee Assistance Program (EAP) providing international standards and regulations they can thrive both as individuals and teams in our confidential, professional support to all Nokia on RF exposure. We provide installation agile, digital workplace. During the course of 2018, employees and their immediate families on a range employees participated in the Relay for Health step of emotional, practical and work-life issues. procedures and training to those working challenge, powering a virtual baton across multiple for and with Nokia to ensure that time zones and countries, connecting everyone in World Safety Day 2018 equipment is installed correctly and radio Nokia globally and putting wellbeing on the agenda As part of our drive to make Nokia a great, safe and wave exposure levels are in compliance with for a day. Over 1 200 employees participated across healthy place to work, we also celebrated World established exposure limits. We engage 124 countries travelling approx. 77 000km. Safety Day during the week of 23 April 2018 across the company. Kicked off with a video message from with customers and partners about RF Manage is about establishing globally consistent our CEO, we held local events at 50 of our sites with a exposure to our products and provide people management practices that recognize variety of people-centric activities. detailed instructions to ensure they operate and proactively support positive wellbeing. Line equipment appropriately to keep the manager training on issues such as workload and Collaboration and best practice in Tanzania pressure helps our people managers to openly and Work at height and technology, two of our core general public and workers’ exposure below confidently discuss wellbeing concerns with their activities, were present in a two-day workshop in Dar the established exposure limits. For more team. This enables them to identify the sources of es Salaam, Tanzania. 120 representatives from the detailed information see Nokia RF exposure stress early and to proactively address them. Our operators, customers, the telecom regulator and statement at 1-in-90 process requires a regular dialogue between suppliers worked together and shared knowledge line managers and team members to enable mutual about lifting techniques and practices. Our Virtual www.nokia.com/about-us/sustainability/downloads feedback. Having included a specific discussion point Reality Work at Height video was also demonstrated on employee wellbeing and work-life balance, this to give those not familiar with tower climbing the provides the platform to agree concrete actions opportunity to experience it. which are followed up in the next round of discussion.

Care is one of the building blocks of the Nokia Way. In wellbeing terms this means building consistent support services globally and providing timely,

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Collaboration is key to creating shared value that underpins the drive for a more sustainable society and world. Together we can make a much greater impact on the social, environmental, ethical and economic challenges of our time.

Nokia People & Planet Report 2018 Nokia today Our approach Connectivity Environment Integrity People Together Key data Assurance 146 7.1 Highlights in 2018 Highlights in 2018 g4g More than greenlight for girls 2× 99.8 STEM events in eight Nokia sites around the world employee volunteering hours compared to 2017

Over 1 400 000 % 33 of our community universities individuals investment contributions supported through our University Donations program reached by our community investment programs since 2016 aligned with our three thematic priorities

Nokia People & Planet Report 2018 Nokia today Our approach Connectivity Environment Integrity People Together Key data Assurance 147 7.1 Making change happen together

Increased cooperation Transparency Competence development Making Audits and assessments Positive change Reporting Policy engagement Increased sustainability change interest and reporting ICT & sustainability happen Standardization Suppliers together Government and Investors organizations

We achieve the greatest positive Connecting the Joint research unconnected impact through collaboration Donations program Empowering girls and Customers Support talent between industries, civil society, women NGOs Academia Technology projects customer segments, employees Saving lives and other stakeholders.

CR reviews Employees

Joint projects Engagement Supply chain cooperation and development

Energy and sustainability Volunteering solutions

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Priority area Material topic Targets Achievements 2018 Status

Achieved

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Making change In order to accelerate achievement of the United happen together Nations Sustainable Development Goals, we understand that we cannot just concentrate on our own actions and challenges. We need to work with a broad range of other stakeholders that can bring their skills, knowledge and power to the table to help resolve the environmental, social and governance challenges the world faces and create opportunities for all.

We work with customers, suppliers, partners, industries, academia, non-governmental organizations, cities, governments and civil society, who all have an important role to play in making positive change happen.

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Supporting We continued our work with our customers, both communication our customers’ service providers and enterprise, sustainability in a number of key areas of goals sustainability including energy and resource efficiency, critical communication and disaster response, efficient manufacturing, supply chain transparency, modern slavery and community involvement.

Our greatest positive impact in the fight against climate change comes through the products we supply to our customers, helping them reduce their carbon footprint with more energy efficient products. For more information see section 4.5 under Protecting the environment. We also offer a range of products, software and services that enable The association has 17 operator members. In Connecting the unconnected more efficient delivery of the end-user services our 2018, we carried out some audits based on JAC Today, Internet penetration is at 55 percent with customers offer to their customers. requirements and also signed up to be part of the more than three billion people still unconnected. ongoing JAC Academy initiative to further develop These unconnected users exist both in emerging Our collaboration with the Joint Audit Cooperation auditors’ knowledge of JAC’s requirements. More markets as well as in developed markets. In emerging (JAC) initiative, the association of some of the information can be found at jac-initiative.com. Our markets, the average revenue per user (ARPU) is not world’s largest telecom operators who work together representatives also again participated in the annual high enough to cover the building and operational with suppliers such as Nokia to assess and develop JAC Forum in Shenzhen, China covering topics such costs (i.e. economic reachability is difficult). In corporate responsibility implementation across as circular economy, responsible sourcing, and health developed markets, there are hard-to-reach areas the manufacturing centers of those suppliers. and safety in the supply chain. with small populations, such as archipelagos or

Nokia People & Planet Report 2018 Nokia today Our approach Connectivity Environment Integrity People Together Key data Assurance 151 7.4 Supporting our customers’ sustainability goals

mountain regions (i.e. geographic reachability is we collectively acknowledge the need for shared difficult). goals and coordinated action to shape an inclusive, sustainable, digital future. Our Community Hosted Network solution is a revolutionary new product to address these Smart Agriculture as a Service issues. The solution addresses the cost structures The Nokia Worldwide IoT Network Grid (WING) is a surrounding base station installation and operation, managed service that helps telecom operators go and requires only any available public internet for to market quickly and enable improved economic backhaul connectivity. The base station is designed and social opportunity. It has been created as a to be installed and maintained by a local user without service that can help operators and enterprises prior telco experience. When the base station is enter the world of IoT or further grow their existing powered on for the first time, it connects to a Cloud IoT offerings. Smart Agriculture as-a-Service Operation Support System (OSS) that configures it to provides subscription-based access to regional connect automatically to the operator network. The climate and pest data for farmers to mitigate risks, first commercial deployments of the solution were thus improving the possibility for greater crop done in the first half of 2018 in Finland with local yield. Nokia delivered a smart farming solution to private LTE focused operator Ukkoverkot. During the one large customer to increase farm production, summer of 2018, the team and Vodafone Hutchinson reduce spoilage and reduce energy use and optimize Australia conducted successful field trials in regional operations costs. The solution provides a single view Australia, creating connectivity for local potato into all farm assets (agriculture / livestock) as well as farmers to use LTE data and VoLTE as well as IoT reduced energy consumption in farm operations. connectivity to automated irrigation systems. For more information visit networks.nokia.com/ We also advocate for more urgency in connecting the services/wing. unconnected through top level engagements in key international fora. For example our CEO continues We work closely with our customers to connect the to be active in the UN Broadband Commission; unconnected and bring the benefits of technology Nokia hosted a UN High Level Panel on Digital to all people, to bring efficiency to industries, and Cooperation in our own premises in Helsinki in to minimize any potential misuse of technology March 2019. We contributed to the World Economic while maximizing the positive use. Read more in Forum (WEF) report “Our shared digital future” the Improving Lives chapter and the Human Rights where along with other contributors (leaders from section of this report. business, government, academia and civil society)

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Corporate Community Investment | Our CCI mission Collaborating Our work with non-governmental 1 organizations continued in 2018 Connect4 the Empowering Saving with NGOs based on our three key pillars unconnected women lives of connecting the unconnected, In cooperation with our • Empower women Our technologies and partners, create network and girls with skills employees are part of empowering women, and solutions and platforms to: to participate and the solution join the connected saving lives. • Connect the unconnected world • To build resilience • Bring benefi ts of our • Attract women and respond to technologies, such as and develop their worldwide challenges and natural disasters In 2018 our Corporate Community Investment (CCI) access to education careers in the ICT business and STEM • To connect people to program was covered large programs on corporate better health and regional level and smaller volunteering-based initiatives locally. As per the London Benchmark Group (LBG) methodology, we also calculated our university donations as part of our total CCI experience the world of ICT and STEM will provide You can read more on cases on pages 156 –157. contributions. You can read more on our university the basis for a grassroots change to the current donations in Collaboration with universities, cities, gender diversity in ICT and other industries that Our total CCI impact and other industries. recognize the full capabilities of the other 50 percent Our collaboration with Corporate Citizenship of the world’s population. Finally, the technology and London Benchmark Group (LBG) on impact Corporate level programs solutions we create and deliver can play an ever- measurement, benchmarking, and data analysis of Our corporate level community investment approach increasing role in responding to global challenges and our community investment programs was continued is aligned with our corporate strategy, business natural disasters, and building resilience in the most for 2018. drivers, and the UN Sustainable Development Goals. vulnerable places and communities. We aim to look at programs that have a long-term In 2018, we invested EUR 6.5 million in impact and create a sustainable platform for the In 2018 we had five large programs under the communities around the world, representing a future in the target communities. Firstly, connectivity corporate level approach. These programs were the 5 percent decrease in contributions from 2017. The can bring greater access to education, health Unicef programs on mHealth in Indonesia and on decrease is largely due to multi-year partnerships services, disaster relief, and business and market digital learning and connecting schools in Kenya, in which funding was provided in previous years. opportunities to the underserved communities of the finalization of the long-term early education 89 percent of the contributions were provided the world. Through our technology and its inherent program in Myanmar with Save the Children, as well as cash, 11 percent as employee time and a benefits, we aim to connect the unconnected. continuation of greenlight for girls’ program across minimal share as in-kind non-cash resources. Secondly, we believe that empowering women and multiple countries and the Dreams program for The key regional (India and China) contributions girls by enabling and encouraging opportunities to young people in Finland. covered 38 percent of the total spend, corporate

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26 percent, university donations 23% and the supported over 10 000 people to develop new skills remaining 12 percent came from local markets. or personal effectiveness and contributed to an improvement in the wellbeing or quality of life of 99.8 percent of the global and key regional over 57 000 people. contributions supported our three themes and when the local programs are included, 95 percent of Volunteering our total contributions were aligned with the three Guidance for all employees on volunteering is thematic priorities. Most contributions in 2018 were provided through our Volunteering guidelines and classified under the Connecting the unconnected is further enhanced with our standard operating theme. procedure (SOP) on charitable sponsorships and donations. In 2018, our employees contributed As output of the projects, we are proceeding well around 18 500 hours of volunteering in paid working with our target of improving the lives of 2 000 000 time, significantly up from 7 500 in 2017. We people over the period 2016 to 2025 through our see there is still a good deal of room to increase Thein Zaw / Save the Children corporate and key regional community investment the number of hours, as the corporate guidance programs, focusing our action on our three themes. allows two days a year per an employee when and In 2018, our programs had around 304 200 direct where possible. On the other hand, we do not beneficiaries. Since 2016, already around 1 426 600 have currently a global system in place to track all people have benefitted from our programs. As employee volunteering hours, so the reported time type of impacts received, in 2018, our programs figure is likely under representative.

In 2019 we look forward to encouraging and 95% of Nokia’s total community investment contributions supporting more local programs around the world were aligned with the three thematic priorities where our employees volunteer. We will continue with select large signature programs, but also look 5% 60% 5% at engaging and supporting our employees in their 4 giving back to their communities. 3

1 Connecting the unconnected 60% Engaging with our communities ©UNICEF/Noorani/2018 1 2 Saving lives 30% on the ground 3 Empowering women 5% 2018 was an active year for our Location None of the above 5% Development teams around the world. In addition 2 4 to their operational responsibilities, our employees invested volunteer hours, during their working time, 30% into humanitarian, environmental, and local solidarity

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Examples of local volunteering

Location Project description India, Bangalore Bio-diveristy Survey & Lake Clean up - Madiwala Lake conservation project. On World Wetlands Day 2018 Nokia and WWF India launched the conservation and management plan for Madiwala Lake in Bangalore, in collaboration with Karnataka Forest Department (KFD) and Lake Development Authority (LDA) - towards the cause of Wetlands for a Sustainable Urban Future. Nokia Bangalore volunteers were involved in these activities.

Poland, Krakow Lego workshops were organized in one of Krakow’s child care homes to teach children programming through play and to inspire them to become interested in technology.

China, Nanjing Nanjing TC participated in the international events of ITU – “Girls in ICT Day”, opening its door to female students from Nanjing University of Posts and Telecommunications. The students visited Nanjing R&D office and lab, enjoyed technology demos and face-to-face communicated with female models.

France, Paris Through our presidency of the @talentEgal association, we mentored disabled students to help them graduate and find employment.

China, Qingdao Qingdao is a city with large population. Hospitals are short of blood for most of the year. We contribute blood every year for local hospitals badly in need of blood to save lives.

Germany, Ulm Engagement to support integration for refugees. Buddy helps for example to deal with bureaucracy in Germany, explain different questions.

initiatives, in addition to the time taken for these those in need. To take our sustainable achievements activities on personal time. to the next level, we give particular distinction to our locations that not only lead several corporate Whether offering basic material aid – food, clothing, responsibility initiatives, but also record the number books, toys - or social support – tutoring for of volunteers and beneficiaries. We do this so that underprivileged children, fun outings for orphans, we will be able to fully recognize their efforts and try wellness visits to the elderly – our location employees to raise the bar of our involvement next year. Some have demonstrated that they are always willing to of our key programs and related achievements in take time to make every person feel connected. 2018 are summarized here. More information on our corporate community investment programs can be Our Location Development actively supported seen at our website. our Corporate Community Investment mission by continuing our CCI/CSR (Corporate Social Responsibility) award in 2018, to underscore the ©UNICEF/Rabenstein/2018 importance which our company attributes to helping

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Cases Case 1: Early Childhood Care extend internet connectivity to remote, disadvantaged Case 5: Projects with Digital and Development in Myanmar and unconnected schools and maximise the impact of Empowerment Foundation in India with Save the Children the Kenyan government’s investment in the tablets. In 2018 the piloting process began, following approval As a telecommunications technology leader, Nokia These activities Since 2015, Nokia has supported Save the Children in from the Kenyan Government. For more information visit is committed to improving people’s lives through support various Myanmar to improve access and quality of pre-school www.nokia.com/about-us/sustainability/making-change- connectivity. We launched our flagship CSR project SDG Targets such education, especially for the most marginalized children happen-together/community-investment-and-ngos. Smartpur with our partner NGO Digital Empowerment as 5.b: in remote areas of the country. Through this partnership, Foundation. The project aims to create a sustainable “Enhance the use of enabling communities, as well as local and national authorities, have Case 3: greenlight for girls (g4g) ecosystem where community members can leverage technology, in particular been supported to further develop and increase access to digital tools to bring efficiency to daily lives, transparency information and communications Early Childhood Care and Development (ECCD) services. We again rolled out programs around the world in order in governance, economic prosperity for households technology, to promote the empowerment of women”. Over the past two years, Nokia and Save the Children to encourage young women and girls into STEM subjects. and ease of access to various government services and have also developed and deployed a mobile-based app to Read more under our Diversity section. information. There are five key areas of development overcome challenges in collecting and sharing important under the project – health, education, livelihood, data from ECCD centres. Read more at www.nokia.com/ Case 4: Save the Children governance and finance – to build a holistic, digitally about-us/sustainability/making-change-happen-together/ integrated village. Read more at www.nokia.com/about-us/ community-investment-and-ngos. and Nokia in India sustainability/improving-peoples-lives-with-technology/ Since 2014, we have worked with Save the Children in India connectivity. Case 2: Connecting the unconnected and to implement social protection programs and reduce the impact of natural disasters on vulnerable children and their Project Kanchiloom was launched in 2017 with our partner empowering girls in Kenya with Unicef families. We have helped to increase the resilience and NGO, Digital Empowerment foundation. This project We have been working with Unicef in Kenya since the capacity of children and their communities to reduce disaster concentrates on improving livelihood opportunities for the beginning of 2018 to enable equitable access to quality risk and provide relief and rehabilitation when disasters hit, weaver cluster in Kanchipuram in the state of Tamil Nadu in education for children in Northern Kenya. This is being by creating critical infrastructure and raising awareness the south of India. The project leverages digital technology done by providing schools in remote locations with access of disaster risk reduction. The task force groups formed to enhance the core skills of the weavers, facilitates to the internet, digital educational content in line with the in each village under the project have responded to both financial inclusion by connecting weavers to various new school curriculum and teacher training workshops to major emergencies such as the Bihar floods and the Vardha central and state government schemes, and eventually build capacity on how to effectively use the digital content Cyclone, and daily risks such as fire accidents in the slums. aims to connect the weavers directly to the market place and related hardware in schools. through e-commerce. Read more about our work with Save the Children in India By providing technical expertise and financial support, on page www.nokia.com/about-us/sustainability/making- Nokia has worked with Unicef to establish a plan to change-happen-together/community-investment-and-ngos.

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Case 6: Improving education In 2018, we donated towards building a smart classroom Oxfam Refugee Crisis Appeal which will provide clean opportunities in China for Xiao Liangshan primary school, to build a playground water, sanitation and essential supplies to hundreds of Ninglang is a poverty-stricken county in Yunnan province, in the NSB hope school, provided smart management thousands of Rohingya refugees in Bangladesh. located in western China. 98 percent of Ninglang is training to county leaders, and had two employees working mountainous terrain, populated by minorities with their on the frontline in Ninglang. Our program of employees Plan International’s Digital Gender Divide program, which own languages and dialects. As of today, there are still supporting Ninglang children in need and volunteer builds up young people’s work-related skills and capacities more than 40 000 people living in extreme poverty in the programs are ongoing. in Uganda and Ethiopia. region, with an income of less than RMB 10 (USD 1.5) per day. Potatoes are the main food all year round for the We also support an Internet Classroom against Poverty Despite the holiday season, the charities received over people living in the Ninglang mountain regions and for the program with the NGO Zhonggu, in other areas in China. 3400 votes from employees in more than 100 countries. first time in 2018 when our employees visited they saw a For more information on those programs visit www.nokia. The votes were calculated via an external voting platform reliable water source in one village where previously rain com/about-us/sustainability/making-change-happen- and each charity will receive the proportion of the total and snow were collected to provide water for the villagers. together/community-investment-and-ngos. budgeted donation funds based on the percentage of votes they received. We will be reporting on how the For the last 16 years Nokia Shanghai Bell employees have Case 7: Season’s Greetings campaign money was used in next year’s Sustainability Report. been helping the people of Ninglang through focused educational support. The employees have built a hope In 2018, we again held our annual festive internal charity school, provided long-term sponsorship to some classes, campaign from mid-December to mid-January. three built internet classrooms, sent employee volunteers to charities were chosen by the Corporate Responsibility teach local children as well as online distance learning team and a voting competition was opened to all of our classes run by our employees. employees to cast their votes for their favorite charity target. The three chosen programs were: We have had 300–400 employees paired up with 300–400 underprivileged students (mainly girls), providing basic Red Cross Disaster Relief Fund, which provides funds, financial support (RMB 800 per year) to them to complete materials such as tents, blankets, food, and professionals basic education. Cumulatively, our employees have in disaster situations around the world. contributed more than 5 000 hours of volunteer work to help the people of Ninglang.

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Working with We believe in the power of collaboration by working with governmental industry partners and engaging and multilateral with policy makers, international organizations and multilateral organizations, civil society and academia, to help transform towards a digital economy and society. We believe digital technology can strongly contribute to reaching the 17 United Nations Sustainable Development Goals (SDGS).

Our approach to governments We build and maintain relationships with governmental stakeholders and ensure they understand our strategy and positions. We contribute to key policy We are honest, truthful, and accurate when dealing We interact with governments and governmental debates fostering a connected society and the with governments, and we follow Nokia policies and bodies at multiple levels and in a variety of ways adoption of new technologies around the world. We procedures, and any applicable laws in our dealings - as a business providing goods and services, as a share our opinions and recommendations in an open with government officials. We do not participate concerned citizen petitioning to protect our interests, and transparent way with governments, legislators, in the political or electoral process through direct as a taxpayer, and as a private sector participant trade associations, international organizations, and donations to political groups, but we protect our providing jobs and economic opportunities in more customers and partners to promote the opportunities interests through lawful and transparent advocacy than 100 countries around the world. of a connected world for all. with relevant stakeholders.

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The special requirements that apply to our More details of our activities with some of these European Telecommunications interactions with governments and state-owned industry and international associations can be found Network Operators' Association (ETNO) enterprises and their employees, including, for later in this chapter. A a key policy group for European electronic example, procurement, lobbying, entertainment, communications network operators. hospitality, disclosure and record-keeping rules are World Economic Forum defined in our corporate guidelines and standard The World Economic Forum (WEF) is an international The European Round Table of Industrialists (ERT) operating procedures. organization for public-private cooperation committed to improving the state of the world. The A forum bringing together chief executives and Our corporate guidelines for dealing with Forum engages the foremost political, business, chairmen of major multinational companies of government officials include that we ensure that and civil society leaders from all walks of life to European parentage covering a wide range of government officials, when requesting information shape global, regional, and industry agendas and industrial and technological sectors. from Nokia, have a right to such information and that create positive change in the world. Nokia is an we have a right to deliver such information, that we active partner of the Forum with the engagement Nokia is an active member (observer in ETNO) in all conduct due diligence to verify that all information of our President and CEO Rajeev Suri and other three associations. Our Chairman of the Board of provided is current, accurate and complete. Our executives. For example, in 2018 we initiated a Directors, Risto Siilasmaa, is a member of the ERT standard operating procedure include, for example, project to analyze 5G socio-economic impacts at forum and Nokia Senior Executive Markus Borchert is conditions and limitations for offering hospitality and WEF and will provide a resource to drive it in 2019. currently President of DIGITALEUROPE. entertainment to government officials. GSMA Other national industry associations Our guidelines for dealing with government officials The GSMA represents the interests of mobile We are also a member of national industry always apply, regardless of the employee’s role and operators worldwide, uniting more than 750 operators associations in various countries. Some examples are the purpose or frequency of interaction. They also with over 350 companies in the broader mobile the Technology Industries of Finland in Finland, CTIA apply for interactions with employees of state-owned ecosystem, including Nokia. The GSMA also produces and Telecommunications Industry Association (TIA) companies and other governmental customers. The the industry-leading Mobile World Congress events in the USA, The French Alliance of Digital Industries basic guidance for interaction with a government held annually in Barcelona, Los Angeles and Shanghai. (AFNUM) in France and Bitkom in Germany. official is laid down in our Code of Conduct. Every Nokia has joined MWC events for many years. Nokia employee has an obligation to be aware of the Annual membership fees of the above-mentioned Code and to act accordingly. European industry associations key memberships sum up to a total 1.5 million euros.

Industry cooperation DIGITALEUROPE Cooperation in standardization We are a member of industry and international A trade association representing digitally In addition to industry association -type of associations and other initiatives and networks, transforming industries in Europe and advocating memberships Nokia takes an active part in the representing the interests of the sector and striving for a regulatory environment that enables European standardization of progressing digitalization. Our for developments in the economy and society at a businesses and citizens to prosper from digital key memberships in this arena include 3GPP, ETSI, national, regional and global level. technologies. ITU, IETF, 5G-IA, 5G PPP and Linux Foundation.

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You can read more on the scope of each association Education is key to preparing future generations to Nordic CEOs for a sustainable future on our website. thrive in a digitized world. This is why we support Our CEO joined CEOs of some of the Nordic region’s WEF’s Closing the Skills Gap 2020 project and within largest listed companies in a common commitment A snapshot of our activities in 2018 this framework we committed to focus on early to integrate the UN Sustainable Development Goals education in Myanmar. Closing the Skills Gap 2020 into their respective business strategies and create World Economic Forum is a global call for measurable commitments from a forum for exchange of experiences and exploration In 2018, we continued our collaboration as a partner leading companies to train, reskill and upskill the of shared initiatives. The aim behind the initiative of the World Economic Forum (WEF). The Forum current and future workforce. is to speed up the realization of the world’s most strives in all efforts to demonstrate entrepreneurship important “to do” list, achieving the UN SDGs. The in the global public interest while upholding the Leadership at the United Nations Broadband initiative also creates a platform for Nordic prime highest standards of governance with moral and Commission for Sustainable Development ministers to engage directly with CEOs on how to intellectual integrity. The International Telecommunications Union (ITU) move from sustainability as a compliance exercise to and the United Nations Educational, Scientific, and how to lead successful purpose-driven companies. Our President and CEO, Rajeev Suri, is a member Cultural Organization (UNESCO) set up the Broadband A key objective is to explore ways to deliver more of the Steering Committee of the Digital Commission for Digital Development to strengthen impact through collaboration. In summer 2018 Communications Governors and of the Stewardship UN efforts to meet the Millennium Development some of the CEO representatives of the initiative Board of the WEF Digital Economy and Society Goals (MDGs). The aim was to boost the importance met with the Norwegian Prime Minister to discuss System. He and members of our global leadership of broadband on the international policy agenda how to accelerate achievement of the global goals. team have made important contributions to and expand broadband access in every country as a For the latest information on the initiative go to the Forum by sharing their expertise on the driver of progress towards national and international www.nordic-ceos.com. advancement of digital technologies such as 5G, development targets. IoT, and AI to improve the state of the economy EQUALS while empowering citizens. We have contributed to The Commission was relaunched in late 2015 as the We have been an official Partner of the United Nation WEF’s report “Our Shared Digital Future”. and to Broadband Commission for Sustainable Development and International Telecommunications Union (ITU) the creation of Responsible Digital Transformation to showcase and document the power of ICT and EQUALS Global Partnership to promote awareness, – Board Briefing. In 2018, we joined the Partnering broadband-based technologies for sustainable building political commitment, and leveraging Against Corruption Initiative (PACI). PACI operates development. resources and knowledge. EQUALS partners seek as a global platform centered on global principles to achieve digital gender equality and through this, for countering corruption and works to enable As a UN Broadband Commissioner, our President improve the livelihoods of millions around the world. companies to maximize their collective impact in the and CEO actively engages to discuss how to connect More information www.equals.org/partners and fight against corruption. the unconnected and advance the Sustainable on our activities in 2018 go to page 137 under our Development Goals through technology. Respecting people chapter.

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Other selected activities region on the power of the digital economy. As such, we contributed to the Bank’s online course (MOOC) - Digital4Development Opportunities and Challenges of the Digital Economy Digital technologies and services are enablers of in Latin America, to highlight the importance sustainable development and can accelerate reaching of connecting the unconnected, the social and development policy objectives such as job creation, economic benefits of IoT, and the importance of gender equality, agriculture and food security, gender parity in technology access and adoption. good governance and rule of law (e-governance), Join the MOOC here. sustainable energy and climate change mitigation, (e-energy and e-climate change), and addressing the Digital Declaration root causes of irregular migration. That is why we, Nokia joins global initiatives meant to confront global along with SAP, Orange, Philips, SES and Ericsson set challenges created by digitalization. Nokia’s CEO up the D4D coalition to promote digital infrastructure signed a Digital Declaration joining a cross-industry investments in developing countries (initially in movement of CEOs committed to act ethically in Africa). The D4D coalition serves as a private sector the digital era (respect the privacy of digital citizens; platform to consult on and help shape European aid handle personal data securely and transparently; and investment into the digital sector. take meaningful steps to mitigate cyber threats; and ensure everyone can participate in the digital WSIS and ITU Telecom economy as it develops). The Declaration helps We join important fora of global exchanges on companies deliver what matters most to digital connectivity and sustainability. The World Summit citizens, industry and governments. We are also a on the Information Society (WSIS) Forum represents signatory of The Paris Call for Trust and Security in the world's largest annual gathering of the ICT for Cyberspace and of The Cybersecurity Tech Accord. development community. We participate and speak With those initiatives, we want to contribute to at the event. In September 2018 we also sponsored improve the security, stability and resilience of the the ITU Telecom event in Durban, South Africa, and cyberspace. contributed to the discussions there. Board memberships in sustainability Latin America and technology for good related organizations Connecting the unconnected is also an important During 2018 Nokia employees were members of pillar of the collaboration we have with governments the board of directors of groups such as the Global and multilateral organizations. We are highly engaged Networking Initiative (GNI), Finnish Business and with the Inter-American Development Bank and its Society (FiBS) (vice chair) and the UN Global Compact education efforts to government officials around the Finland (founding board).

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Collaboration We work with a broad range of academic institutions in areas with universities, such as collaborative research, cities, and other training programs, innovation industries events, talent development and continuous learning. Our University Donations Program provides further opportunity to work with world-leading universities to further scientific exploration, develop talent, and share and create knowledge.

Through its Distinguished Academic Partner program, Nokia Bell Labs fosters intensive collaboration with the best and brightest minds • We became a founding partner of a new Centre like research of AI and future 6G, or indirectly, like from the world’s top universities and academic for Mobile, Wearable Systems and Augmented other sectors of society where the role of ICT will organizations to drive a vision of future human Intelligence, based in Cambridge’s Department of be high. Contributing to universities is a crucial needs. We have created a global network of world- Computer Science and Technology. The Centre will component of our work exploring how technology leading partners delivering disruptive innovation in advance the state of the art in a variety of fields can improve people’s lives. In 2018, we contributed technologies such as 5G technologies, AI, advanced including mobile systems, security, new materials, EUR 1.5 million to 33 universities across the world to materials, Industrial IoT. This network provides and AI to address one of the main human needs – foster scientific innovation for this aim. access to cutting-edge expertise to build our the ability to communicate better with each other. talent pipeline. As an example, our donation to the Aalto University In addition to Nokia Bell Labs program, we have a in Finland is enabling the development of technology In 2018, Nokia Bell Labs launched new strategic University Donations Program. The generic guidance to enlarge x-rays and subsequently reduce the initiatives with University of Cambridge in the UK and is to sponsor high quality research in areas that are time necessary to classify wrist injuries. We are also with Carnegie Mellon University (CMU) in the US; close to our business interests, either rather directly, funding research at the University of Lancaster in

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the UK to explore the use of sound for memory joined forces with Smart City Capital, LLC to launch a work with energy and utility companies to advance augmentation to help people living with dementia. joint program to help Canadian cities fund and reduce towards the next stage of automation, safety, Within communications, our donation to the the risks associated with smart city initiatives. efficiency and control of the most remote operations. Stevens Institute is helping to explore the future We hyperconnected, safer and more sustainable of communication in the age of digitalisation by In India, we announced cooperation with Indian transportation systems whether aviation, rail or advancing our understanding of the potential operator, BSNL and a Smart Telecom Pole project, road. And we work with multiple industries to drive connection between humans and machine devices. which provides connectivity and is integrated with improvements in automation and logistics. 5G, IoT • We collaborated with CMU’s CyLab to launch a new smart LED lighting system, CCTV cameras, digital and cloud computing will underpin a massive leap research initiative focused on building secure and billboards and environmental sensors. This smart forward across all aspects of life. privacy-respecting large city-scale IoT systems. pole solution has been designed and built in India to support smart city initiatives. In 2018 Nokia, ABB and Kalmar, part of Cargotec, Working with cities successfully conducted industrial trials that leverage Cities are seeing unprecedented growth, bringing We also introduced enhancements to our in-home the low latency capabilities of 5G to support time- major challenges as they seek to remain sustainable, Wi-Fi solution that maximize Wi-Fi performance and critical applications and enhance protection and healthy and safe places for people to live and work. simplify network management. The new Wi-Fi solution efficiency in smart electricity grid and harbor IoT offers new opportunities for cities to use data expands our portfolio with meshed Wi-Fi gateways and automation. In India, we worked with BSNL, a leading to manage traffic, cut pollution, make better use of beacons, delivers a new Wi-Fi Home Portal for service telecom operator in India, to implement the next infrastructure and keep citizens safe. providers, introduces a mobile application for users level of industrial automation, leveraging 4G LTE and provides new software functions and analytics technology to enable greater operational efficiency The competitiveness of cities and municipalities that improve network intelligence. at Nokia's Chennai plant. The project aligns with is increasingly dependent on the availability of the Indian Government's Make in India program, technology. 5G, IoT, cloud computing, fiber and AI For more information on how technology can improve which aims to promote excellence in manufacturing will bring high quality broadband services to address the lives of people in cities around the world, see in the country. To address Industry 4.0, Nokia has individual and business requirements. City and networks.nokia.com/industries/smart-city. applied a Conscious Supply Network concept at its municipal governments see the need to transform factories leveraging digitalization, analytics, and their own telecom infrastructures to improve their Industry and digitalization robotics across the overall supply chain. In April internal processes, safety, security and resource Our end-to-end portfolio of solutions and services, 2018, we launched the industry’s first Edge Cloud efficiency and provide citizens and businesses with and the skills of Nokia Bell Labs provide the gateway data center solution for the 5G era, supporting access to government and other services. to the next age of industry and the Fourth Industrial industry automation and consumer applications. Revolution where human, machine and intelligence These are just a few examples of the work we do We are already working with cities across the globe will connect like never before. to make industry more efficient, smarter and more to bring smart solutions and services to make these sustainable. For more information go to needs a reality. In 2018 we announced our cooperation In the public sector we offer solutions that improve networks.nokia.com/industries. with Hanoi, Vietnam, providing unified real-time quality of life, emergency decision-making and management of all smart city assets and services. We response through ultra-broadband networks. We

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The sustainability data presented in the following pages covers Nokia Group, covering the calendar year 2018 and where available, trend data since year 2015. Before the data tables we describe the data reporting principles.

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Data Scope and boundaries provide a more meaningful historical comparison of used tools, and emission factors. Below we explain The sustainability data presented in this report the consolidated Nokia Group with Alcatel Lucent. key information from the Handbook. covers Nokia Group, including Networks business, Therefore, 2015 sustainability data fromboth reporting Nokia Technologies and Group Common and legacy companies has been recalculated and Resource utilization Other. The report contains limited information on combined for indicators where this was possible Energy data covers stationary and mobile sources principles our undersea cables business, Alcatel Submarine with the same definitions. combustion of fuels and consumption of electricity, Networks (ASN), and our antenna systems business, heat, and cooling in facility operations, as well as Radio Frequency Systems (RFS). Both ASN and RFS For longer term historical development, please see combustion of fuels in the marine fleet. are reported in Group Common and Other. Data is previous Nokia and Alcatel Lucent sustainability covering the calendar year 2018 and where available, reports on www.nokia.com/about-us/sustainability/ Water data covers withdrawal of water from municipal trend data since year 2015. Information dating back downloads/report-archive. sources in facility operations and the share of to 2003 is available on our website. recycled water, which is recycled both for sanitary Adjustments due to methodology change purposes and for irrigation. On 2 November, 2016, we achieved 100% When adjustments have been made compared to ownership of Alcatel Lucent. We use the term earlier reports, they are specified in data table notes. Waste generation covers hazardous and non- “Comparable combined company” when in the data hazardous waste generated in facility operations. trend reporting we refer to information including Assurance In addition, we report separately packaging waste, combined Nokia Group and former Alcatel Lucent Our selected indicators have been assured which is reused in our distribution hubs operated data prior to the acquisition of Alcatel Lucent in by an independent auditor of Nokia, by service providers, and the amount of equipment January 2016. Other newly acquired companies will PricewaterhouseCoopers Oy. The indicator selection collected at the end-of-life. be included in the reporting scope when they have is done based on our materiality analysis, target been legally consolidated and integrated into Nokia setting and specific stakeholder needs. Please see Energy, water, and waste consumption data is systems. Nokia Group data excludes Discontinued more information on Independent Practitioner’s typically collected from facility-level responders, operations, which refer to the sale of the Devices and Assurance Report on page 185. obtained from invoices or metered data. For Services business in 2014 and the sale of the HERE facilities with no data availability, usage is estimated business in 2015. Exceptions to this scope for certain Data collection employing annual intensity factors based on kWh/ indicators are specified in data table notes. The data published in this report is collected through m2 (electricity and natural gas), m3/employee various internal and external reporting systems and (water) and kg/employee (waste), as calculated from Adjustments and comparability consolidated on an annual basis for sustainability the reporting sites, thereby accounting for 100 reporting purposes. percent of Nokia facilities. In 2018, these estimation Adjustments to due structural change procedures accounted for less than 5% of electricity Historical performance data for year 2015 is Environmental data usage, less than 5% of natural gas usage, less provided with two different scopes. The Nokia We have an internal document Environmental Data than 50% of waste generation and less than 30% Group data covers Nokia as it was during 2015. Handbook, where we have documented for example of water use, when compared to total usage, The comparable combined company data aims to data boundaries, data collection methodologies, respectively. Electricity used in subleased areas

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represented approximately 3% of our reported Our carbon footprint Protocol: Carbon dioxide (CO2), Hydrofluorocarbons electricity consumption. Nokia approach to measuring greenhouse gas (HFCs), Methane (CH4), Nitrous oxide (N2O), emissions follows the Greenhouse Gas (GHG) Perfluorocarbons (PFCs), Sulphur hexafluoride Waste generated at our facilities is handled directly Protocol (www.ghgprotocol.org) developed by (SF6). CO2 equivalent (CO2e) is the universal unit by vendors, by landlord vendors and local authorities. the World Resources Institute (WRI) and the World of measurement to indicate the global warming The level of accuracy varies, and we aim to report the Business Council for Sustainable Development potential (GWP) of each of the six greenhouse most accurate data. Where specific weights are not (WBCSD). We use the following three standards: gases, expressed in terms of the GWP of one unit of available, to ensure maximum coverage we employ • The Greenhouse Gas Protocol, A Corporate carbon dioxide. estimation and extrapolation methods. accounting and reporting standard • GHG Protocol, Scope 2 guidance, An Amendment Operational boundaries and Utilized waste includes waste that has been either to the GHG Protocol corporate standard emission calculation reused, recycled, or the energy from it has been • Corporate value chain (Scope 3), Accounting We use the “operational control” approach for setting utilized. Non-utilized waste has been either sent and reporting standard, Supplement to the GHG organizational boundaries for our GHG emissions to a landfill or incinerated without energy recovery. Protocol corporate accounting and reporting inventory. Composting of biowaste is recorded under recycling. standard. We use emission factors available at the end The definitions for what is reported under The GHG Protocol defines three scopes of CO2e- of the reporting year. From 2018 reporting hazardous and non-hazardous waste have been emissions: onwards we have decided to follow GHG Protocol made on a global level to keep corporate reporting • Scope 1 – direct emissions, from sources owned or recommendation to use IPCC 5th Assessment simple. E.g. all discarded batteries and electric & controlled by the company. Report (AR5) GWP100 values. These values do not electronical waste (WEEE) are reported globally Scope 2 – indirect emissions, from the include climate-carbon feedbacks. Some emission under hazardous waste, although only different consumption of purchased electricity, heat, factor data sources still use GWP100 values from sub-categories of WEEE are defined hazardous in and/or steam. As per GHG Protocol Scope 2 AR4 as a data source of their emission factors. The different countries. The actual waste treatment is Guidance - An amendment to the GHG Protocol expectation is that all data sources sill start to use always done according to local legal requirements. Corporate Standard, published in 2015, we report AR5 values in the coming years. Where we use IEA both location-based and market-based Scope 2 Emission factors developed by the International Reported waste data is rounded to hundreds of emissions from 2014 onwards. Energy Agency, OECD/IEA, the emission calculations metrics tons. We ensure the total waste amount • Scope 3 – indirect emissions, as a consequence of have been prepared by Nokia and do not rounds correctly and summed sub-metrics match the activities of the company, but from sources necessarily reflect the views of the International the total. This might lead to small rounding not owned or controlled by the company. Energy Agency. exceptions with the sub-metrics. Greenhouse gases Scope 1 emissions To ensure, that 100% of energy consumption is We report the emissions as CO2e as per GHG Direct CO2e emissions from Nokia facilities include accounted for into the reporting, any invoice gaps Protocol’s guidance. GHG Protocol is including six GHG emissions resulting from the combustion of will receive an estimated value. groups of greenhouse gases related to the Kyoto oil and gas within Nokia facilities, along with minor

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direct releases of GHGs associated with refrigerant we use IEA Emission factors developed by the Scope 3 emissions leakage from facilities’ cooling systems. Emissions International Energy Agency, OECD/IEA. For relevant Scope 3 categories the calculation are calculated by using emission factors published by methodology for estimating emissions is described. United States Environmental Protection Agency (EPA). The market-based accounting method quantifies For non-relevant Scope 3 categories, an explanation Scope 2 GHG emissions based on the emissions is provided. Direct CO2e emissions from our mobile fleet are emitted by the generators from which the reporter 1. Purchased goods and services: emissions are tracked by obtaining information from country- contractually purchases electricity bundled with reported based on data collected with CDP specific leasing suppliers, which are consolidated instruments, or unbundled instruments on their Climate Survey from Nokia’s biggest suppliers, into one system. Emissions calculation is based own. In our case, applicable market-based residual representing 46% of total purchase spend on actual driven mileage and official CO2 emission emission factors are employed for sites located in 2018 (53% in 2017). In 2018 we used a value per km of each car make and model. in Europe (obtained from Association of Issuing hybrid method, using emissions allocated Applicable emission factors are sourced from Bodies (AIB)), United States and Canada (obtained for Nokia by the suppliers and also intensity car manufacturers. As an exception, in the USA from Green-e). Those sites that purchase certified based (GHG/€) allocation, where allocated emissions are calculated based on driven mileages renewable electricity are assigned an emission emissions were not available or allocation was and actual fuel consumption. In the case that the factor of zero based on the quantity of green not reliable based on different internal quality distance travelled is not available from the leasing energy employed. If supplier specific emission measures. Collected data is then multiplied to supplier, the budgeted annual mileage in the factors are not available, location based emission cover 100% of spend. In 2018 calculation we leasing contract is used for calculation. Direct CO2e factors are applied. included only suppliers’ Scope 1+2 emissions, emissions from our marine fleet are calculated not Scope 3 emissions, which were reported based on the fuel type and fuel usage of marine GHG emissions associated with purchased steam only by a small share of respondents. Suppliers vessels. Alcatel Submarine Networks maintains a and heat are calculated employing the applicable EPA providing transportation services for products listing of all owned vessels with associated fuel emission factor, which is based on the assumption are excluded as “emissions from transportation consumption. All GHG estimation procedures are that natural gas was used to fuel a boiler exhibiting and distribution” are reported in a separate based on individual vessel assessments. an efficiency of 80%. scope 3 category. 2018 disclosure is based on the latest CDP data representing suppliers’ Scope 2 emissions GHG emissions associated with purchased chilled year 2017 emissions. We recognize that this Indirect CO2e emissions include emissions from water and cooling are calculated employing the same emission category includes a lot of uncertainty, purchased electricity, heating, and cooling. country emissions factors as electricity, based on an as suppliers have different qualities in their own As per GHG Protocol definitions, the location- assumed efficiency of 100%. reporting and in allocating emissions to Nokia, based accounting method quantifies scope 2 GHG and due to the extrapolation Nokia does for emissions based on average energy generation Emissions avoided due to the purchase of renewable data to represent 100% of Nokia spend. emission factors for defined locations, including local, energy are verified utilizing Guarantees of Origin 2. Capital goods: the relevance of emissions from subnational, or national boundaries. In our case, (GOs) and Green Tariffs in Europe, as well as this category to be included in the Scope 3 location-based emission factors are obtained from International Renewable Energy Certificates (I-REC) inventory is assessed each year, as capital goods EPA eGrid for the USA and for all the other countries in China. purchases vary from year to year. The threshold

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for inclusion is 0.5% of total Scope 1+2+3 several countries. Those results are prorated powered by grid electricity. Since 2018 we use emissions. Emissions from capital goods are to represent commuting of all employees. IEA’s latest world average CO2e -emission factor. based on financial data on property, plant, and 2015–2017 emissions are reported based on a Earlier IEA’s latest four-year world average CO2 equipment additions during the reporting year worldwide survey conducted at former Alcatel -emission factors were used. and estimated by using the GHG Protocol Scope Lucent in December 2015. Since no employee 12. End-of-life treatment of sold products: not 3 Evaluator tool. commuting survey had been conducted for considered relevant. Based on an LCA done 3. Fuel and energy related activities not included the combined Nokia company, the results of by Nokia for a typical Nokia mobile network in Scope 1 and 2: not presently being assessed, the previous survey were prorated, based on product (urban base station site in Europe), the because emissions are by calculation less than 2015–2017 Nokia headcount. use- phase accounts for over 84% of global 0.1% of total Scope 3 emissions. 8. Upstream leased assets: not presently being warming potential, production (supply chain and 4. Upstream transportation and distribution: assessed as leased vehicles and facilities are own operations) for 14%, logistics for 2% and Data includes emissions from inbound and presently assessed in Scope 1 emissions. end- of-life treatment rounds to 0%. End-of-life outbound logistics. Data is based on the top 9. Downstream transportation and distribution: treatment emissions are not significant either in 19 (17 in 2017) logistics supply partners (LSP) not presently being assessed as the share of other Nokia product categories. delivery data (tonne-km) and transportation transportation and distribution paid by the 13. Downstream leased assets: not presently being mode. Reporting is done with real weight, by customers is so small that emissions of this assessed because emissions are by calculation using EPA’s CO2e emission factors. Upstream category were below 0.5% of total Scope 3 less than 0.1% of total Scope 3 emissions. emissions include emissions from transportation emissions. 14. Franchises: not applicable, as Nokia does not paid by Nokia. 10. Processing of sold products: not considered have franchises. 5. Waste generated in operations: not presently relevant because processing is not required for 15. Investments: not applicable, as this category being assessed because emissions are by sold Nokia products. is designed primarily for private financial calculation less than 0.1% of total Scope 3 11. Use of sold products: The calculation formula institutions. emissions. is following: ∑ [total lifetime expected uses of 6. Business travel: emissions are reported for products (hours) X number of products sold in Reported emission data is rounded to hundred business air travel, which has the biggest impact reporting period X products power consumption metric tons. We ensure the total Scope 1, 2 and 3 out of business travel modes. Travel information (kW) X emission factor for electricity (kg CO2e/ amount is rounded correctly. This might lead to small is obtained from our assigned Travel Agencies. kWh)]. Data covers products from Nokia’s rounding exceptions with the sub-metrics. Supplied data includes distance travelled, Network business groups. Product use time delineated by flight distance ranges and cabin varies between 6 and 15 years, depending on the Year-on-year comparison calculations for all class. Data from travel agencies is consolidated in products. Energy use calculations are based on environmental data are done with non-rounded a system which is used to calculate emissions from product group specific standards, e.g. by ETSI, values. air travel. Emissions factors are obtained from EPA. wherever standards have been published. The 7. Employee commuting: We conducted an objective is to have a product coverage above Social data employee commuting survey in 2018. Survey 80%; in 2018 we are above 90%. Calculations are Year-end headcount is as published in financial results are a representative sample from so far based on assumption that all products are reporting. It should be noted however that the other

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social data presented in the tables represent only Mobility data is obtained from the HR department’s platform is utilized in metrics related to EcoVadis employees included in Nokia’s central HR databases, databases and includes long-term assignments. assessments and the CDP platform related to which differs from the total headcount value as climate change management. Conflict-free smelter follows: in 2018 a total of 5 374 employees were not Occupational health and safety data is obtained from information is reported through Conflict Minerals included in the central HR database (3 055 in 2017, the Health, Safety, Security and Environment (HSSE) Reporting Template (CMRT), consolidated to Master 1 669 in 2016 and 735 in 2015 scope: Nokia Group, department and the indicator name defines, whether Template and compared against Responsible Mineral Continuing operations). the data covers Nokia employees and or contractors Initiative’s (formerly Conflict-Free Sourcing Initiative) and sub-contractors. Cut-off day of incident audit programme lists. Hiring and attrition rates are calculated against the reporting is in early January. There can be some average at month-end permanent headcounts. cases, especially from contractors, reported after Number of new employee hires includes “Hire, the cut-off day. Nokia’s HSSE organization puts most Rehire & Convert from Contractor/External effort on prevention of critical and fatal incidents transactions activity” and excludes merger and and we realize lost-time incidents data may not be as acquisition activity. accurate as the aforementioned data.

Employees with permanent contracts include internal Community investments are including contributions as employees not having data indicating employee is on cash, value of time and value of in-kind. In 2016 –2017 a fixed-term contract or a trainee. cash has represented minimum 95% of the total contributions and around 90% in 2018. The number The definition of Line Manager is a manager with of beneficiaries includes beneficiaries from corporate one or more subordinates. Nokia’s executive and key regional programs. Related to monetary management board is the Group Leadership team. contributions, in addition to global and regional, since Senior management is defined to have job grade 13+ 2017 we are able to track also part of local programs. and leadership 12+. Ethics data Training and education data is obtained from the Data on reported concerns and investigations are NokiaEDU department, which covers former Nokia obtained from the Business Integrity Group (formerly Academy and ALU University. Training provided for Ethics and Compliance Investigation (ECI) team) externals is not included in the employee-related as recorded in the Case Management Tools, and numbers but reported separately. One training day included to the best of the team’s knowledge. includes seven training hours. The average number of all training hours per employee also includes training Supply chain data arranged by Business Groups or external parties, and Data on audits and supplier assessments is obtained training records approved by a Line Manager. from Procurement Quality Office. The EcoVadis

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2015 2016 2017 2018

Nokia Comparable Nokia Nokia Nokia YoY 2018 data Notes Group1 combined Group1 Group1 Group (2017–2018) assured Environmental company2 Greenhouse Gas Emissions data Total GHG Scope 1 (Direct emissions from facilities and mobile sources) 18 500 177 300 189 200 143 500 134 500 -6% 5, 6, 17 (metric tons CO2e) Emissions from Nokia facilities 3

Emissions of GHGs from fuel combustion in facilities (stationary and mobile 2 400 32 300 34 000 33 600 29 000 -14% 4, 17 sources)

Emissions from Hydro-Fluoro-Carbon (HFC) refrigerants 3 400 6 200 1 000 400 600 49% 17

Emissions from Nokia fleet

Emissions from fuel combustion in car fleet 12 700 44 900 36 300 34 300 32 000 -7% 7

Emissions from fuel combustion in marine fleet 0 93 000 117 900 75 200 72 900 -3% 8

GHG Scope 2 (Indirect emissions from purchased electricity and heat), 155 200 502 000 465 700 446 900 364 900 -18% 6, 17, 25 Market-based (metric tons CO2e) Emissions from purchased electricity 145 800 486 600 451 700 423 400 347 300 -18% 17

Emissions from purchased cooling 3 100 3 100 3 300 12 000 7 900 -35%

Emissions from purchased heating 6 300 12 300 10 700 11 500 9 700 -16%

GHG Scope 2 (Indirect emissions from purchased electricity and heat), 219 300 559 900 519 400 482 800 436 900 -9% 6, 17, 25 Location-based (metric tons CO2e) Emissions from purchased electricity 209 900 544 500 505 400 459 300 419 400 -9% 17

Emissions from purchased cooling 3 100 3 100 3 300 12 000 7 900 -35%

Emissions from purchased heating 6 300 12 300 10 700 11 500 9 700 -16%

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2015 2016 2017 2018

Nokia Comparable Nokia Nokia Nokia YoY 2018 data Notes Group1 combined Group1 Group1 Group (2017–2018) assured Environmental company2 data Total Scope 1 and 2 GHG emissions, Market-based (metric tons CO2e) 173 700 679 300 654 900 590 400 499 400 -15% 17, 25 Total Scope 1 and 2 GHG emissions, Location-based (metric tons CO2e) 237 800 737 200 708 600 626 300 571 400 -9% 17, 25

GHG Scope 3, Indirect emissions - - 45 601 000 42 660 700 44 673 500 5% 19

Emissions from purchased goods and services 2 500 000 - 1 725 900 1 428 500 5 284 000 270% 9, 10

Emissions from upstream transportation and distribution 133 400 221 300 268 400 298 500 384 300 29% 6, 9

Emissions from capital goods 220 500 462 400 408 700 499 900 398 200 -20%

Emissions from business air travel 55 000 112 100 113 300 98 000 81 500 -17% 11

Emissions from employee commuting 83 500 159 000 154 700 135 800 118 400 -13% 12, 26

Emissions from use of sold products - - 42 930 000 40 200 000 38 410 000 -4% 9, 24

Total Scope 1, 2 and 3 GHG emissions, Market-based - - 46 255 900 43 251 100 45 172 900 4% 19, 25

Total Scope 1, 2 and 3 GHG emissions, Location-based - - 46 309 600 43 287 000 45 244 900 5% 19, 25

GHG intensities and miscellanious GHG information

Total Scope 1 and 2 GHG emissions per net sales (€ million), Market-based 14 26 28 26 22 -13% 17

Total Scope 1 and 2 GHG emissions per net sales (€ million), Location- 19 28 30 27 25 -6% 17 based

Car fleet CO2e/vehicle km - 150 139 139 135 -3%

Emissions avoided due to purchased renewable electricity 68 300 72 700 100 300 90 000 129 700 44% 17

Biologically sequestered carbon 0 0 0 0 0 0% 13

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2015 2016 2017 2018

Nokia Comparable Nokia Nokia Nokia YoY 2018 data Notes Group1 combined Group1 Group1 Group (2017–2018) assured Environmental company2 Other air emissions (metric tons) data Ozone Depleting Substances (ODS), as ODP 0.03 0.04 0.01 0.00 0.02 1 896% 17

Criterai air pollutants - 53.3 53.7 54.3 63.5 17% 17

Volatile Organic Compounds (VOC) emissions - 1.4 1.4 1.4 1.6 21% 14, 17

NOx - 25.9 26.3 26.0 30.9 19% 17

SOx - 3.4 2.4 4.3 3.7 -14% 17

Total Particulate Matter (PM) emissions - 2.1 2.1 2.2 2.6 15% 17

Other criteria air contaminants - 20.5 21.4 20.4 24.8 21% 17

Energy consumption

Energy consumption in Nokia 6 facilities (GWh) (1 GWh = 3 600 GJ) Electricity, total 414 1 138 1 091 1 039 1 005 -3% 17

Heating, total 28 54 47 51 43 -16%

Cooling, total 6 6 6 24 17 -32%

Fossil gas, total 12 149 138 154 141 -8%

Fossil oil, total 0.5 19 17 17 11 -32%

Biofuel, total 6 6 3 0 0 0%

Nokia People & Planet Report 2018 Nokia today Our approach Connectivity Environment Integrity People Together Key data Assurance 172 8.2 Environmental data

2015 2016 2017 2018

Nokia Comparable Nokia Nokia Nokia YoY 2018 data Notes Group1 combined Group1 Group1 Group (2017–2018) assured Environmental company2 data Facilities' energy, total (GWh) 467 1 373 1 325 1 285 1 217 -5% 17 Direct energy 19 174 180 170 153 -10% 17

Indirect energy 448 1 198 1 145 1 115 1 064 -5% 17

Renewable energy 213 209 269 28% 17

Renewable electricity 206 228 213 209 269 28% 17

Renewable electricity share of total electricity (%) 50% 20% 19% 20% 27% 33% 17

Total energy per net sales (MWh/€ million) 37 52 56 56 54 -3%

Energy consumption in Nokia fleet (GWh) 15

Marine fleet (Fossil oil use) - 355 450 286 278 -3%

Energy consumption outside of Nokia (GWh)

Energy consumption of the sold products - - 81 770 77 760 78 090 0% 9, 24

Water consumption

Total water withdrawal 787 2 623 2 681 2 305 1 791 -22% 6, 16, 17 (thousands m3) Total water withdrawal per employee (m3) 13 22 24 23 18 -22% 17, 18

Water withdrawal by source (%)

Municipal water supply 100% 100% 100% 100% 100% 0%

Recycled/reused water 11 11 23 26 20 -22% (thousands m3)

Recycling/reuse% of total withdrawal 1.3% 0.4% 0.9% 1.1% 1.1% 0% 17

Total water use (thousands m3) 798 2 634 2 703 2 331 1 811 -22% 17

Nokia People & Planet Report 2018 Nokia today Our approach Connectivity Environment Integrity People Together Key data Assurance 173 8.2 Environmental data

2015 2016 2017 2018

Nokia Comparable Nokia Nokia Nokia YoY 2018 data Notes Group1 combined Group1 Group1 Group (2017–2018) assured Environmental company2 Waste and recycling data Waste and recycling within Nokia (metric tons) 6

Total waste 13 100 24 900 28 400 15 000 13 600 -9%

Reuse 2 200 2 300 2 200 1 500 200 -88% 27

Recycle 8 200 17 200 20 100 8 200 6 000 -28% 17, 20, 27

Energy recovery 1 800 1 800 3 300 2 300 400 -81% 20, 27

Landfill 900 2 900 2 800 3 000 7 100 137% 27

Incineration without energy recovery 0 700 0 0 0 0% 17, 21, 27

Total waste per employee (kg) 217 209 254 143 136 -5% 18

Total non-hazardous waste 12 700 22 000 24 800 13 000 13 000 0% 27

Reuse - - 2 200 1 500 200 -88% 19, 27

Recycle - - 16 700 6 400 5 400 -17% 19, 27

Energy recovery - - 3 200 2 300 400 -82% 19, 27

Landfill - - 2 700 2 800 7 000 149% 19, 27

Incineration without energy recovery - - 0 0 0 0% 19, 27

Nokia People & Planet Report 2018 Nokia today Our approach Connectivity Environment Integrity People Together Key data Assurance 174 8.2 Environmental data

2015 2016 2017 2018

Nokia Comparable Nokia Nokia Nokia YoY 2018 data Notes Group1 combined Group1 Group1 Group (2017–2018) assured Environmental company2 data Total hazardous waste 400 2 900 3 600 2 000 600 -69% 27 Reuse - - <100 <50 <50 -89% 19, 27

Recycle - - 3 400 1 800 600 -68% 19, 27

Energy recovery - - <100 <50 <50 -52% 19, 27

Landfill - - <100 200 <50 -88% 19. 27

Incineration without energy recovery - - 0 0 0 0% 19, 27

Hazardous waste by types

Electronic waste from facilities 400 2 400 3 300 1 800 600 -68% 27

Other hazardous waste <50 500 300 200 <100 -73% 27

Utilization rate% 93% 86% 90% 80% 48% -40% 17, 27

Product end-of-life treatment 9, 22 (metric tons) Weight of equipment returned from customers 1 670 3 620 2 450 2 580 4 100 58% 20 for recycling

Weight of equipment returned from customers 90 90 140 120 160 36% 20 incinerated with energy recovery

Weight of equipment returned from customers 30 170 70 20 20 16% sent to landfill

Number of returned equipment items reused/ 24 100 109 300 85 800 68 000 56 100 -17% remanufactured (no. of items)

Weight of packaging materials reused in distribution hubs (metric tons) 2 500 - 2 300 3 700 4 200 14% 9, 23

Nokia People & Planet Report 2018 Nokia today Our approach Connectivity Environment Integrity People Together Key data Assurance 175 8.2 Environmental data

Notes Environmental "-" means we do not have data available for that particular 13. Biologically sequestered carbon (i.e. carbon dioxide does not have significant distribution hubs. 2017 and year or scope. emission from burning biomass/biofuels) and 2018 data includes more hubs than previously. data emissions from fermentation are not relevant for 24. Calculation methodology was updated in 2016 for 1. Values are including Nokia Group Continuing Nokia as we do not burn or fermentate biomass or the combined company. Due to labor intensity only operations, i.e. excluding Discontinued operations biofuels on-site. We used biogas in fuel cells in one of 2015 Combined comparable company value was not refering to the sale of the Devices and Services our offices during 2015–2016. recalculated with the new methodology. Until 2017 business in 2014 and the sale of the HERE business in 14. VOC source is from fuel combustion. No significant world average IEA emission factor used includes GWP 2015. quantities from solvents and halogenated only from CO2, not other greenhouse gases. For 2017 2. Comparable combined company refers to information hydrocarbon, so these emissions are not relevant and and 2018 measured data covered all product lines including combined Nokia Group and former Alcatel not consolidated. across Nokia's Networks business. Lucent data prior to the acquisition of Alcatel Lucent 15. Energy consumption is presented only for marine 25. Nokia uses internally market-based (not located- in January 2016. fleet, as energy consumption data from Nokia's based) values for example in target setting and if only 3. Nokia calculated facility Scope 1 emissions only for vehicle fleet is not available. one value is given without further definitions, it's the stationary fuel combustion and HFCs in 2015. 16. No significant quantities of heavy metals dischareges market-based. 4. Includes CO2e from all GHGs (CO2, CH₄ and N₂O). into water, indicator not relevant and not 26. Based on the official year-end headcount. 5. Data for "Emissions of GHGs from manufacturing, consolidated. 27. Due to the change in Nokia's waste estimation R&D and product development" and "Emissions from 17. Reported number for 2016 has changed during methodology in 2018 YoY (2017-2018) figures are not fire suppression system losses" are not reported from 2017 reporting process due to better data quality of directly comparable. 2018 onwards, since those are not material emissions some parts of actual data from 2016. This data was for Nokia. Total Scope 1 emissions for 2015 still received after 2016 reporting period. include data from removed data sources. 18. Based on average headcount calculated from monthly 6. 2015 values for Nokia Group continuing operations site-specific headcount statistics from facilities recalculated with a methodology aligned for combined database.This calculation procedure results in a company in 2016. See Reporting principles -chapter different total headcount than the total headcount for more details. as of December 31 (disclosed in the Social indicators 7. 2015 Nokia Group value recalculated with a section of the report). methodology aligned for combined company in 2016. 19. 2015 total not counted due to missing comparable See Reporting principles -chapter for more details. Scope 3 categories data. 8. 2015 values recalculated to cover also vessels from 20. 20. Former Alcatel Lucent data included in Combined ALDA Marine. See Reporting principles -chapter for comparable company has a combined figure for waste more details. recycle and energy recovery and it's reported under 9. Data covers Nokia's Networks business. recycle. 10. In 2016-2018 we used a hybrid method, using 21. 2015 data, incineration without energy recovery- emissions allocated for Nokia by the suppliers and as category includes data only from former Alcatel new method, also intensity based (GHG/€) allocation. Lucent sites. See Reporting principles -chapter for more details. 22. Former Alcatel Lucent data included in Combined 11. 2015 Nokia figures recalculated to be in line with comparable company includes product take-back, updated emission factors from EPA. 2017 data repairs and remanufacturing. includes Nokia Group but not Comptel. 23. 2015–2016 data is available only for former Nokia 12. 2015 Nokia continuing operations figure recalculated sites, however excluding Nokia Technologies, which to be in line with calculation methodology of 2016.

Nokia People & Planet Report 2018 Nokia today Our approach Connectivity Environment Integrity People Together Key data Assurance 176 8.3 Social, ethics, and management systems data

2015 2016 2017 2018

Nokia Comparable Nokia Nokia Nokia YoY 2018 data Notes Group1 combined Group1 Group1 Group1 (2017–2018) assured Social, company2 Employment ethics, and Number of employees, year-end situation 55 718 105 228 100 875 102 761 101 203 -2% management Share of employees with full-time contracts 99% 99% 99% 99% 99% 0% Share of employees with permanent contracts 95% - 97% 98% 96% -2% systems data Number of new employee hires 6 031 - 8 310 9 430 8 849 -6%

Rate of new employee hires, % 11% - 8% 10% 10% -3%

Female share of new hires - - 21% 24% 23% -4%

Total number of leavers 4 920 - 10 749 10 033 9 998 0%

Total attrition rate 9% - 11% 10% 11% 6%

Attrition rate of voluntary leavers 6% - 6% 6% 5% -3%

Percentage of open positions filled by internal candidates 38% - 42% 59% 51% -14% 3

Average length of service (in years) - - 11 11 11 0% 4

Number of long-term expatriates worldwide - - 477 397 334 -16%

Diversity & Equal Opportunity

Share of women within workforce 20% 22% 22% 22% 22% 0%

Share of female line managers 15% - 17% 17% 16% -6%

Share of women within senior management 12% - 14% 13% 13% -2%

Share of women within leadership - - 16% 15% 15% 1%

Share of women on the executive management board 0% N/A 17% 13% 14% 8%

Share of women in the Board of Directors 25% N/A 25% 30% 40% 33% (2 of 8) (2 of 8) (3 of 10) (4 of 10)

Number of nationalities in the executive management board 4 (of 4) N/A 8 (of 12) 8 (of 15) 8 (of 14) 0%

Share of non-Finnish in the executive management board 70% N/A 92% 93% 93% 0%

Average age of employees at year-end 38 - 40 41 41 0%

Nokia People & Planet Report 2018 Nokia today Our approach Connectivity Environment Integrity People Together Key data Assurance 177 8.3 Social, ethics, and management systems data

2015 2016 2017 2018

Nokia Comparable Nokia Nokia Nokia YoY 2018 data Notes Group1 combined Group1 Group1 Group1 (2017–2018) assured Social, company2 Number of nationalities within workforce - - - - 166 - 5 ethics, and Training & Education management Total number of training days provided by Nokia EDU to employees 163 600 278 400 249 100 234 300 309 400 32% 6, 8 Total number of training days provided by Nokia EDU to customers and 61 500 - 111 000 119 800 110 000 -8% 8 systems data suppliers Average number of all training hours per employee 35 - 19 16 34 113%

Number of attendees in corporate leadership programs - - - 3 526 3 862 10% 7

Training costs of employee by Nokia EDU, € million 31 - 54 49 29 -41% 11

Percentage of employees that completed a performance evaluation 98% - 90% 94% 99% 5% 9

Workplace Relations & Employee Engagement

Share of employees responding to the engagement survey 92% N/A 20% 21% 31% 48% 10

Employee engagement (percentage of favorability towards the company) 87% N/A 76% 82% 80% -2% 10

Occupational Health & Safety

Near miss incidents reported (including contractors) 428 - 303 417 454 9%

Lost-time incidents of employees 40 - 57 41 39 -5%

Employee work-related fatalities 0 0 0 0 0 0%

Contractor and sub-contractor work-related fatalities 6 - 7 5 1 -80%

Community investments

Total value of contributions (EUR million) - - 5.02 6.84 6.53 -5%

Number of direct beneficiaries - - 868 300 254 100 304 200 20%

Nokia People & Planet Report 2018 Nokia today Our approach Connectivity Environment Integrity People Together Key data Assurance 178 8.3 Social, ethics, and management systems data

2015 2016 2017 2018

Nokia Comparable Nokia Nokia Nokia YoY 2018 data Notes Group1 combined Group1 Group1 Group1 (2017–2018) assured Social, company2 Ethics ethics, and Total number of concerns reported 225 558 637 678 887 31% management Conflict of Interest 14 31 34 55 55 0% Controllership 58 100 119 71 74 4% systems data Dealing with Government Officials 4 7 3 2 0 -100%

Fair Competition 1 7 2 5 9 80%

Fair Employment (all HR related) 34 83 200 231 336 45%

Guidance 68 141 120 141 186 32%

Human Rights 2 2 0 2 2 0%

Improper Payments 4 18 12 11 13 18%

Intellectual Property & Confidential Information 9 36 51 31 59 90% 13

Privacy 7 9 8 0 8 - 14

Trade Compliance 2 4 0 6 5 -17%

Wellbeing, Health, Safety and Environment 6 90 60 23 24 4%

Working with Suppliers 16 20 25 40 58 45%

Other 0 10 3 60 58 -3%

Number of investigations by the Ethics & Compliance Office 124 257 228 257 248 -4%

Number of allegations substantiated with "cause found" after investigation 51 141 86 127 92 -28%

Number of employees given a verbal counselling related to Code of 32 54 11 13 9 -31% Conduct

Number of employees given a written warning on grounds of violation of 18 38 40 45 16 -64% Code of Conduct

Number of employees dismissed on grounds of a violation of the Code of 62 77 17 47 24 -49% Conduct

Nokia People & Planet Report 2018 Nokia today Our approach Connectivity Environment Integrity People Together Key data Assurance 179 8.3 Social, ethics, and management systems data

2015 2016 2017 2018

Nokia Comparable Nokia Nokia Nokia YoY 2018 data Notes Group1 combined Group1 Group1 Group1 (2017–2018) assured Social, company2 Share of employees who have completed the annual training on ethical 98% - - 86% 95% 10% 15 ethics, and business practises (Ethical Business Training) (%) Management systems management ISO 14001 certified environmental management system, percentage sites 94% - 39% 52% 57% 10% 16, 12 systems data covered OHSAS 18001 certified occupational health and safety management 93% - 39% 46% 56% 22% 16, 12 system, percentage sites covered

ISO 9001 certified quality management system, percentage sites covered 94% - 51% 61% 68% 11% 16, 12

ISO 14001 certified environmental management system, percentage 100% - - - 83% - 16, 17 employees covered

OHSAS 18001 certified occupational health and safety management 99% - - - 78% - 16, 17 system, percentage employees covered

ISO 9001 certified quality management system, percentage employees 100% - - - 93% - 16, 17 covered

Nokia People & Planet Report 2018 Nokia today Our approach Connectivity Environment Integrity People Together Key data Assurance 180 8.3 Social, ethics, and management systems data

Notes Social, N/A means this metric is not applicable for that scope. "-" two target questions: “Overall, as a company, Nokia 13. Includes also category: Guidance-Investigation means we do not have data available for that particular is heading in the right direction” and “Overall, 14. Category was called "Health, Safety & Labor ethics, and year or scope. Nokia’s culture is heading in the right direction”. Conditions" in 2015–2016. Due to Nokia’s commitment to protecting employee 15. There was no new ethical business training in 2016 1. Nokia Group values include Nokia Group Continuing anonymity during the electronic survey process, for "legacy" Nokia employees. 90% of former Alcatel management operations, i.e. excluding Discontinued operations we cannot prove that each CCT round saw unique Lucent employees completed Nokia's ethical business refering to the sale of the Devices and Services respondents; in 2018 we again continued to be more training in 2016. systems data business in 2014 and the sale of the HERE business than satisfied that, while reaching an average of 16. Scope is Nokia's Networks business (Comptel included in 2015. All supply chain management data, with approximately 31% of the employee population over for 2017 data). Multiple buildings on the same site are exception of share of conflict-free smelters, covers 2 survey rounds, we easily exceeded the necessary counted as one site. Excludes buildings classified as anyhow only Nokia's networks business. levels for statistical representation. In 2018 report carparks, restaurants and warehouses. Covers year- 2. Comparable combined company refers to information we corrected a typo and updated the engagement end situation or as close to year-end as good quality including combined Nokia Group and former Alcatel percentage of year 2017, from 80% to 82% data available. Lucent data prior to the acquisition of Alcatel Lucent in 11. In addition to NokiaEDU (formerly Nokia Academy) 17. After the acquisition of Alcatel Lucent in 2016 January 2016. costs, 2015 costs include also Nokia Technologies comparable data to calculate the percentage of 3. 2015–2016 data are not fully comparable due to overall training costs. employees included for 2016 and 2017 was not methodology change. 2016 onwards data is from 12. In 2016, the approach to certification of the two available.. recruitment department. companies was very different. Nokia took the approach 4. Mobility data is covering Long Term Assignments. of implementing global management systems and 5. In 2018 nationality-data covers 78% of total certifying, under one certificate, almost all locations headcount. to the management system standard. Former 6. For the 2015 combined comparable figure, Nokia EDU Alcatel Lucent held multisite certificates for these covers legacy Nokia Academy and ALU University. management system standards but did not cover all 7. In 2018, 24% of the participants were women. locations within those certifications. The management 8. Nokia migrated to a combined Learning Management systems were merged and all current Nokia business System early 2017 and did a lot of data cleansing operations and processes are in line with globally back to previous years data, hence the 2016 value is defined standards and processes. To ensure this, somewhat updated. we have extensive internal assurance processes 9. From 2017 onwards this process is called Annual to monitor the implementation and compliance in Development Review. key areas such as supplier assurance (see section 10. In 2016 Nokia switched away from the annual 2015 Responsible sourcing for more information), health Employee Engagement Survey (EES) – an annual and safety high-risk project control assessment, and census style deployment – towards a more focused we regularly report on progress. In addition to large approach of the Culture Cohesion Tracker (CCT). The offices, a portion of our headcount is distributed at CCT has a drastically reduced volume of questions, multiple locations such as small sales, project, and so was deployed five times in 2016, and twice field offices in customer premises, and in the majority during 2017 and 2018. In 2016, we used an average of these facilities we have very little to no control over favorability of all CCT engagement questions as an the building or space. After initial integration, the focus indication of our Employee Engagement favorability was on site consolidations and synergy savings which towards the company. From 2017 onwards, we impact the coverage of the management systems until followed favorability based on average of the following such time that the situation is more settled.

Nokia People & Planet Report 2018 Nokia today Our approach Connectivity Environment Integrity People Together Key data Assurance 181 8.4 Supply chain management data

2015 2016 2017 2018

Nokia Comparable Nokia Nokia Nokia YoY 2018 data Notes Group1 combined Group1 Group1 Group1 (2017–2018) assured Supply chain company2 Number of Corporate responsibility (CR) on-site audits (focused on labor 16 20 45 72 75 4% 3 management conditions and environment) against Nokia Supplier Requirements and SA8000 data Closure percentage of non-conformities identified at CR-audits, within - - - 58% 52% -10% audit closure target time

Number of on-site system audits against Nokia Supplier Requirements 24 45 39 47 38 -19% 3

Cumulative number of valid Health & Safety Maturity assessments - 59 382 975 1 406 44% 4, 5

Number of suppliers assessed on corporate responsibility in EcoVadis 155 376 306 274 251 -8% Sustainable Supply Management platform

Percentage of active suppliers rated “satisfactory” or above on their 61% - 70% 71% 74% 4% assessment of sustainability by EcoVadis

Number of suppliers assessed on their climate change impact based on 180 - 243 292 314 8% their CDP reporting for Nokia

Number of suppliers that set GHG emission reduction targets (in CDP) 92 - 127 153 187 22%

Number of suppliers participating in Nokia sustainability workshops and 159 - 238 253 309 22% webinars

Number of management-level supplier employees participating in Nokia 208 - 389 423 606 43% sustainability workshops and webinars

Share of smelters that have been validated as conflict-free or are active in 83% 84% 84% 83% 84% 1% 6 the validation process (out of known smelters in Nokia’s supply chain), %

Nokia People & Planet Report 2018 Nokia today Our approach Connectivity Environment Integrity People Together Key data Assurance 182 8.4 Supply chain management data

Supply chain Notes 1. Nokia Group values are including Nokia Group management Continuing operations, i.e. excluding Discontinued operations refering to the sale of the Devices and Services business in 2014 and the sale of the HERE data business in 2015. All supply chain management data, with exception of share of conflict-free smelters, covers anyhow only Networks business. 2. Comparable combined company refers to information including combined Nokia Group and former Alcatel Lucent data prior to the acquisition of Alcatel Lucent in January 2016. 3. Comparable company data includes former Alcatel Lucent on-site system audits done against Alcatel Lucent supplier requirements. 4. Comparable combined company values include data only from former Alcatel Lucent. 5. If supplier’s evaluation result is satisfactory in H&S Maturity Assessment process, period between reassessments can be longer than a year, based on our internal guidelines taking into account different risks. 6. 2015 Comparable combined company value counted as average from Nokia and former Alcatel Lucent figures.

Nokia People & Planet Report 2018 Nokia today Our approach Connectivity Environment Integrity People Together Key data Assurance 183 8.5 Financial data

2015 2016 2017 2018 2018 data Financial data Nokia Group Comparable Nokia Group Nokia Group Nokia Group assured2 combined Financial company1 data Net sales (EUR million) 12 499 26 606 23 614 23 147 22 563 Operating profit /loss 1 697 2 887 -1 100 16 -59 (EUR million)

R&D expenses (EUR million) 2 080 - 4 997 4 916 4 620

Notes Values include Nokia Group Continuing operations, i.e. excluding Discontinued operations refering to the sale of the Devices and Services business in 2014 and the sale of the HERE business in 2015.

1. Comparable combined company historicals reflect Nokia's operating and financial reporting structure, including Alcatel Lucent, and are presented as additional information as described in the stock exchange release published on April 22, 2016. These values are non-IFRS. 2. Included in the audited financial statements. Please see Auditor's Report from page 203 onwards in the "Nokia in 2018" Annual Report.

Nokia People & Planet Report 2018 Nokia today Our approach Connectivity Environment Integrity People Together Key data Assurance 184 9.0 Independent assurance report Independent practitioner’s assurance report

Our key sustainability indicators have been assured by an independent auditor, PricewaterhouseCoopers Oy.

Nokia People & Planet Report 2018 Nokia today Our approach Connectivity Environment Integrity People Together Key data Assurance 185 9.1 Independent assurance report

Independent To the Management of Nokia Corporation • Energy consumption within Nokia, by types of Improving people’s lives indicators We have been engaged by the Management of Nokia energy (GWh) and change to 2017 (%) • Number of subscriptions Nokia’s radio networks Corporation (hereinafter also “the Company”) to • Renewable electricity amount (GWh) and portion of customers provided service for practitioner’s perform a limited assurance engagement on selected total electricity consumption (%) • Number of lives improved through corporate and Nokia Group’s sustainability information for the • Water withdrawal in facilities (m3) and change to key regional community investment programs assurance reporting period 1 January 2018 to 31 December 2017 (%) 2018 as set out in Nokia’s People & Planet Report • Waste amount within Nokia, by treatment type Supplier indicators report 2018 on the Company’s website (hereinafter “the (metric tons) and utilization rate (%) • Number of forced labor non-compliance instances Selected sustainability information”). • Energy savings achieved in 2018 due to network found in supplier audits modernization • Share of suppliers delivering high-risk activity Selected sustainability information • Voluntary product takeback from customers: assessed by using Nokia Health & Safety Maturity The scope of our work was limited to assurance Weight by treatment type (metric tons) and Assessment Process and share of assessed over the information summarised below. The number of returned equipment reused/ suppliers meeting “H&S compliant supplier”-status information covers Nokia Group (Continuing refurbished (%) operations), as indicated in the People & Planet • Share of smelters that have been validated as Report 2018. We have not been engaged to provide Social indicators conflict-free or are active in the validation process assurance on any information relating to prior • Number of work related employee fatalities (out of known smelters in Nokia’s supply chain) (%) reporting periods or to any other information in the and number of work related contractor and • Number of suppliers that set GHG emission People & Planet Report 2018. subcontractor fatalities reduction targets (in CDP) • Share of employees who have completed the • Number of system audits against Nokia Supplier Environmental indicators annual training on ethical business practises Requirements • Scope 1 greenhouse gas (GHG) emissions, by (Ethical Business Training) (%) • Number of in-depth on-site audits (focused on sources (metric tons CO2e) • Number of Compliance Controls Framework labor conditions and environment) against Nokia • Scope 2 GHG emissions, market-based and reviews Supplier Requirements and SA8000 and share of location-based (metric tons CO2e) • Number of concerns received as alleged violations closed non-conformities (%) • Combined Scope 1+2 GHG emissions: 2018 of our anti- bribery policies, involving 3rd parties, • Number of suppliers assessed on Corporate emissions and progress against 2030 Science- and the number of such concerns substantiated Responsibility in EcoVadis Sustainable Supply based target • Sustained focus on CEO-sponsored Nokia Culture Management platform and share of suppliers with a • Scope 3 GHG emissions: use of sold products Principles (measured with favorability of two target satisfactory performance level (score ≥ 45/100) (%) (metric tons CO2e). 2018 emissions and progress questions in the CCT employee survey) against 2030 Science-based target • Share of women within leadership (%) • Scope 3 GHG emissions: employee commuting • Number of managers trained on inclusive (metric tons CO2e) leadership best practices

Nokia People & Planet Report 2018 Nokia today Our approach Connectivity Environment Integrity People Together Key data Assurance 186 9.1 Independent assurance report

Management’s responsibility limited assurance engagement in accordance with the information from original documents and systems The Management of Nokia Corporation is responsible International Standard on Assurance Engagements on a sample basis for preparing the Selected sustainability information (ISAE) 3000 (Revised) “Assurance Engagements • Testing the consolidation of information and in accordance with the reporting criteria as set out in Other than Audits or Reviews of Historical Financial performing recalculations on a sample basis. the Company’s own documented standards and GHG Information”. That standard requires that we plan Protocol (hereinafter “the Reporting criteria”). The and perform the engagement to obtain limited Limited assurance conclusion Management of Nokia Corporation is also responsible assurance about whether the Selected sustainability Based on the procedures we have performed and for such internal control as the management information is free from material misstatement. the evidence we have obtained, nothing has come determines is necessary to enable the preparation of to our attention that causes us to believe that Nokia Selected sustainability information that is free from In a limited assurance engagement the evidence- Corporation’s Selected sustainability information material misstatement, whether due to fraud or error. gathering procedures are more limited than for a for the reporting period ended 31 December 2018 reasonable assurance engagement, and therefore less is not properly prepared, in all material respects, in Practitioner’s independence assurance is obtained than in a reasonable assurance accordance with the Reporting criteria. and quality control engagement. An assurance engagement involves We have complied with the independence and performing procedures to obtain evidence about When reading our assurance report, the inherent other ethical requirements of the Code of Ethics for the amounts and other disclosures in the Selected limitations to the accuracy and completeness of Professional Accountants issued by the International sustainability information. The procedures selected sustainability information should be taken into Ethics Standards Board for Accountants, which is depend on the practitioner’s judgement, including an consideration. founded on fundamental principles of integrity, assessment of the risks of material misstatement of objectivity, professional competence and due care, the Selected sustainability information. Our assurance report has been prepared in confidentiality and professional behaviour. accordance with the terms of our engagement. We Our work consisted of, amongst others, do not accept, or assume responsibility to anyone PricewaterhouseCoopers Oy applies International the following procedures else, except to Nokia Corporation for our work, for Standard on Quality Control 1 and accordingly • Interviewing senior management of the Company this report, or for the conclusions that we have maintains a comprehensive system of quality control • Visiting one site in France reached. including documented policies and procedures • Conducting a web conference with two sites in regarding compliance with ethical requirements, India and USA Helsinki 13 May 2019 professional standards and applicable legal and • Interviewing employees responsible for collecting regulatory requirements. and reporting the Selected sustainability PricewaterhouseCoopers Oy information at the group level as well as at the site Practitioner’s responsibility level Pasi Karppinen Our responsibility is to express a limited assurance • Assessing how group employees apply the Authorised Public Accountant (KHT) conclusion on the Selected sustainability information reporting standards and procedures of the based on the procedures we have performed and Company Sirpa Juutinen the evidence we have obtained. We conducted our • Testing the accuracy and completeness of the Partner, Sustainability & Climate Change

Nokia People & Planet Report 2018 Nokia today Our approach Connectivity Environment Integrity People Together Key data Assurance 187 Nokia Head Office Karaportti 3 FI 02610 Espoo, Finland FINLAND

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